There are a variety of reasons you may need to make an oversees payment: you may need to pay a client or employee, you may need to send cash to a friend or family member, you may owe oversees tuition, you may be making an oversees investment, and so on.
Regardless of what the case may be, if you’ve never had to make an oversees payment before, it’s important for you to know what your various options are so you can easily make the best decision for you.
Here are the top four methods for making oversees payments:
Use An International Money Transfer Service
There is an entire industry focused on making international money transfers. Examples include companies such as Western Union or Remitly.
To use an international money transfer service, you have a number of options: you can visit their physical establishment, you can visit their website, or you can use their app if they have one (which most of them do).
How it will work is you will pay the amount you want to transfer in your local currency. The service will then convert that amount into the currency of the country you’re sending the money to based on the exchange rate. This exchange rate is shifting on a constant basis, and it will be higher or lower depending on the specific service that you choose.
The advantage to using an international money transfer service is that it is usually a faster and cheaper option versus using an alternative option such as a bank wire transfer.
Write A Foreign Check
Another option for sending money internationally will be to write up a check and then send it to your recipient for them to cash out.
The main disadvantage to this method is that it’s easy for your recipient to run into a number of problems, especially since the rules and regulations regarding checks differ depending on the country. As a result, it could take weeks for the check to clear.
Another disadvantage to sending a check is that it is expensive. Even if the bank in the country of your recipient accepts the check, they will still charge a processing fee and a percentage of the exchange rate.
Do both you and your recipient have a PayPal account? If so, then you’ll be able to use PayPal’s remittance service to make an international money transfer.
All you will need to do is enter the amount of money you want to send to your recipient and enter their email address or phone number. PayPal will then convert that amount into the currency of the country of your recipient based on their exchange rate.
While it’s certainly a fast option, PayPal typically only works for smaller transactions of $2,000 or less. With any amount larger than that, PayPal will most likely put a hold on the transfer to investigate it before declining it or allowing it to transfer through. Either way, it can take several days for them to make a decision.
PayPal also typically charges a portion of the exchange rate in order to make profit from the transfer, so you’ll have to be prepared to pay that amount in addition to the flat transaction fee.
Wire Money With Your Bank
Finally, one of the most well-known methods for making an international transfer of funds is to simply make a wire transfer with your bank. This can be done either in-person at your bank or online.
Wire transfers are certainly simple but they come with a numbers of cons. The most notable of these is the price. Banks will charge a hefty fee that’s not uncommon to be in the $50-75 range. This means if you’re sending a smaller sized sum of money such as $500 or so, this will be quite the expensive option. Your recipient will have to pay a fee for receiving the funds as well.
Furthermore, there’s the issue of time. A wire transfer typically will take anywhere from three to five business days to process and complete. For that reason, it’s not a very good option if the money needs to be sent urgently.
Making Oversees Payments
While there are more methods out there for making oversees payments beyond the ones that we have covered in this article, the methods that we have covered here are definitely the most common ones as well as the easiest ones to use.