International Money Transfers

Written by Linda Alexander
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Wire money transfer services have lowered their rates over the past few years as competition from banks, credit unions, and online payment services has grown. However, they are still usually a more expensive way to transfer money internationally. The fees to send and receive money vary by location, but they are sometimes as high as 15 percent.

Lower Money Transfer Rates at Banks and Credit Unions

As a general rule, banks offer lower fees and better exchange rates than wire services. Yet the wire services are faster and more convenient as well as reliable. Their locations extend farther than many banks into more countries and in rural areas as well as large cities. That's a boon to immigrants who send money home from the U.S. to help out their families.

Banks and the postal service offer money orders, too. They aren't the fastest way to send money because the sender has to mail them. Still, they are a low-cost alternative to wiring money and recipients can cash them in many places. They work well for people without bank accounts because they are paid for with cash. Money orders are similar to checks in that they are made out to specific people and done on paper.

In several countries, international money transfers amount to more than ten percent of the gross domestic product. In Mexico, for example, their value exceeds revenues from agriculture and tourism. Often, immigrants do not have bank accounts in the U.S. or cannot get them because they do not have driver's licenses. In those cases, wiring money home or mailing money orders are their only options unless they have credit cards or bank accounts.

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