There are many reasons why you might need to send money abroad. The important thing to remember is that the majority of methods for doing so are rather expensive.
Online money transfer companies, also called forex (foreign currency exchange) companies, make this service quite affordable. However, there are many of these companies today and not all of them can be trusted. Studying their reviews will help you understand which of the available FX services is best for you.
Who Needs Online Money Transfer Companies?
The speed of globalization is growing steadily, and even the current pandemic crisis did nothing to stop it. In fact, this crisis makes it more obvious that people, in general, require more digital and online-based services to facilitate everyday tasks. Sending money abroad is one of those tasks, the demand for which is growing fast.
This is because a great number of people today aren’t constricted with geographical borders. The number of expats, migrant workers, travelers, and international investors has grown incredibly in the last decades. And all these people need to make regular, and sometimes large, cross-border money transfers.
One also shouldn’t forget international online shopping. Merchants that want to sell abroad must use efficient payment processing methods. Traditional banks are out of the question for them because bank transfers can cost 3-7% of the transfer volume. This cost often erases any competitive advantage an online merchant can offer. PayPal and Amazon Payments are popular and cheaper alternatives. However, even with them the cost of every transfer will range around 3-5%.
Considering this situation, the demand for a cheaper method of transferring money abroad has grown fast. Online money transfer companies were the solution developed to meet this demand.
How Do Online Money Companies Work?
These companies use a very simple but effective strategy for arranging cheap international transfers. Basically, you make one easy and cheap domestic transfer from your account to the company. Then, it deposits an equivalent amount to the recipient’s account making the same domestic transfer from its account in their country.
That, as well as the fact that online-based companies have low overhead costs, are two of the main reasons why this type of transfers is affordable. However, the most important is the third reason, which is the fact that these companies trade currency wholesale.
Due to this, they are able to keep the FX margin quite ow. In fact, some of the leading companies might offer mid-market currency exchange rate for large transfers. Overall, the cost of making a transaction through an online company is around 0.5-2% of the transfer volume.
But you need to remember that these companies differ greatly. The online money transfer industry isn’t as well regulated as banking. Therefore, you need to be careful when picking a service provider. Studying reviews will be the best way to learn the strengths and weaknesses of every option. That’s why you should check out the list of MTC’s best money transfer companies. MTC, or MoneyTransferComparison is the leading platform for detailed and frequently updated reviews for FX companies right now.
Top 6 Money Transfer Companies for 2021
Currencies Direct is one of the industry veterans. The company was founded in 1996 and it has grown and evolved greatly since then. It’s now renowned for being one of the FX companies delivering the highest rate of customer service. It has stellar reviews and near to 5-star rating on popular consumer review platforms, like TrustPilot. The company has won multiple awards for both service and business innovation.
What’s more important for you as a customer is that Currencies Direct transfers about £7.5 billion in a single year. Therefore, it can afford to keep currency exchange rates very low. Moreover, this is one of the companies that charges no fees at all. The minimum transfer amount is £100.
Furthermore, the company offers currency guidance as well as expertise for international real estate investors. The low cost of large transfers and 22 offices worldwide make Currencies Direct a good choice for property investors.
But be advised that the services of this company do not extend to some of the US states. Also, it doesn’t support some more exotic currencies.
WorldFirst is a company with an interesting history. It has been on the market since 2004 and built a reputation of reliability. In 2019, it was purchased by Ant Financial, which is a part of the Alibaba Group. The result is that the reputation and skill of the company’s original team received a huge infusion of capital. WorldFirst was one of the top money transfer services even before that. But after, it gained a good chance to fight for the leading position.
Today, WorldFirst offers a fixed margin scheme that starts at 0.15%. There are also no fixed transfer fees at all. The offer is currently unmatched in the industry. But the minimum transfer amount is £1,000.
Due to its close association with Alibaba, the company also offers a range of helpful services for online merchants. It has more than 250,000 active clients at the moment and is very easy to use. Customer reviews are highly positive.
WorldFirst services aren’t available in the US and Quebec.
Moneycorp is one of the oldest and most trusted online money transfer companies. It’s a true giant that trades about £35 billion in various currencies every year. The company might not have the most progressive web design for its website and app. However, it does have a fantastic offering of low rates and fees. With Moneycorp you pay less for big transfers, which is why it’s good for investors and businesses. That said, the minimum transfer is only £50.
The company offers a wide range of corporate services and payment solutions. It even has a banking license issued in Gibraltar. Therefore, Moneycorp has gone well beyond a mere transfer company.
It has stellar reviews and responds to customer complaints fast. Unfortunately, it’s not available in some of the states of America.
Global Reach is an online money transfer company that supports 138 currencies. This allows you a lot of room for going truly global with your business. The company mostly specializes in private clients and smaller transfers. The minimum is £100.
Global Reach trades about £5.5 billion every year. It charges no fees and offers a very easy-to-use solution and a simple registration process. The level of customer satisfaction is high and FX rates are rather low.
If you want to go global, you want to use OFX money transfers. This company’s reach is unparalleled. £20 billion of annual turnover also help it offer some of the best FX rates you can find. The company is big, but it maintains high standards of customer service. It also offers very good and easy-to-use apps.
Note that OFX is contracted with 115 banks worldwide. This allows for very cheap and fast settlements in many locations. The company is public and completely transparent. It rarely charges fees and accepts debit and credit cards.
TransferWise is the biggest company in the industry today. It’s highly innovative and uses a fixed margin scheme starting at 0.5%. The company is highly resilient even to the global economic crisis and is fully transparent and trustworthy.
It’s also focused on private clients and small personal transfers. The fees are low, which makes transfers the cheapest. But they are also fixed, so big transfers can be more expensive compared to other FX companies in the industry.
Due to its strategic focus, TransferWise does not offer many FX-centric services like hedging, dealer guidance, etc. However, as the company is the biggest on the market now, TransferWise payments can be integrated into any platform.