Dangerous and best practice to send money overseas

Everyone must have wondered once in their lives: what is the best solution to send money overseas ? Well, many different solutions exist and the best one simply depends on your needs.

Is it easy to send money overseas ?

Well, if you don’t want to get screwed by the amount of fees you pay, I guess the answer is no…unless you use the same magic tool as I use.

Why is it so complicated ? Well the money transfer market is extremely complex and expensive.  No solution out there is the best solution worldwide. There are more than 500 serious solutions according to the world bank. Plus a new Fintech is created in London every to help people send their money faster & cheaper… at least this is what they say. Last but not least and maybe the most important point: nearly all the solution out there apply hidden fees in the exchange rate when you want to send money overseas! Therefore, the best way to send money overseas is to compare every solutions in two click thanks to the magic free tool I have just shared with you.

What are the different ways to send money overseas ?

Now, let’s look at our options. Whatever the amount you would like to send, you can go use your bank (which I would disrecommend when you see the amount of fees they hide in the exchange rates) or go for a cash to cash solution which usually are extremely expensive as well. Alternatively, you can use mobile wallet solutions which are very used in Africa for example. Or you can also chose to send money overseas using your credit card and allowing the recipient to pick-up the money in cash.

All this having been said, the cheapest solution is when you are capable of wiring money from one bank account to another by using a MTO which stands for Money Transfer Operator (more infos here). The later have been created especially due to the high fees charged by our banks and enable a very fast and secure payment. Meanwhile as their are so many of them out there and knowing that most of them are not transparent at all when it comes to presenting their fees, you ought to compare the different options using the free tool I suggested you. This will save you a lot of time and money when sending money overseas.

If ever you had to send money from cash to cash, I would invite you to look for new solutions which currently exist and enable you to exchange money hand to hand with people living in the same town as you and who are interested in the opposite currency as yourself. Tried that once myself & it works well though is quite time consuming I must admit.

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How do I send money abroad to my child studying in Mexico

This is it your child has been accepted for a semester in a university in Mexico and obviously you will need to send money abroad to help him with the day-to-day expenses. It is always hard in a parents’ life to let your child go and live the adventure of studying abroad.

You might get panicked at some point, not only because of the departure and the separation but on the financial aspects: how do actually send money to Mexico? You have probably never done that before. No panic, we’re here to help and sending money abroad has never been so easy.

You actually have several options when it comes to international money transfers. Let’s figure out which one is the best.

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Send money abroad using your bank

It is probably the easiest solution for you, providing that your child will open a bank account in Mexico. You just have to call your branch and they will set up everything for you. You just have to give them your child’s IBAN and BIC.

The only problem with this solution is the cost of such transfers. The fees are outrageously high and you’ll generally end-up paying fixed fees, variable ones and hidden ones because of a poor exchange rate. The receiving bank might apply some fees as well. In total, be prepared to pay around 10% of the amount you are willing to send in fees.

Send money abroad using high street operator

Another option that you have is to use an operator like Moneygram or Western Union that you can easily find in post offices. This is also an easy option; however fees are also extremely high and you do not get the level of security you have with your bank (there will be no compensation if something occur during the transfer). The only advantage it has is that your child will be able to collect the money without having a bank account. So it might be a solution for the first month but we do not recommend using it for an entire semester or academic year.

Send money abroad online

Using online money transfer service is probably the safest and cheapest option on the market as of today. There are many of them Transferwise, Azimo, WorldFirst etc. The process is quick, simple and saves you money as their fees are super low compared to banks. You always know how much you’ll be paying for your transfer and your child will never be surprised by the amount received. Transfers are generally processed within 2 to 3 days.

The only downside is that there are many online operators today on the market and a growing need to compare them before choosing one. Fortunately, a company recently created an online comparison platform that you can access here. With 3 clicks you get a full comparison of the money transfer operators that send money from the UK to Mexico.

In the end, just make sure you compare your options before sending money abroad to your child. And just relax, everything is going to be fine.

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Why sending money overseas is expensive?

As an expat I have been sending money overseas for a long time and I have always wondered why it is still that expensive in the 21st century? It seems that the industry has not changed much for the last decades. Let’s try to understand why.

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Sending money overseas is very lucrative

The industry has been dominated by 2 major actors for a very long time: Banks and Money transfer operators such as Western Union or Moneygram. According to the World Bank, the cost of sending money overseas each year is of $32 billion. This money goes directly to the actors I have just mentioned. Can you image what we could do if we manage to reduce that cost?

The worst think with banks and MTO (money transfer operators) is that they make you believe that sending money overseas is cheap or sometimes free. They are so good at marketing and manipulation that everyone is going for them. But there is one thing you should know: free money transfers simply do not exist.

First, you will always pay a certain fee, either fixed or variable. Then, the most pernicious thing they do is that they generally apply a poor exchange rate, meaning that they will make money due to the difference between the real exchange rate and the one they have applied to you.

How sending money overseas can be cheap?

You first have to stop trusting your bank or misleading advertising trying to sell you free money transfer. Always look for the small asterisk with sneaky conditions. Let me give you 2 tips to make sending money overseas cheap:

–       First make sure you monitor the exchange rate. If you send money when the exchange rate is low, you’ll be indirectly losing money right? It seems logical but very few people actually do it.

–       Second: find and compare services before sending money overseas. There are many new actors today on the market such as Transferwise that allow you to send money at almost no costs. They do not have hidden fees and you end up paying only 2% of the amount transferred. Nothing compared to the 10% of banks! The only issue with these new actors is that there are many of them covering different areas of the world. So there is a growing need to compare them.

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13 secrets about transfer money overseas the governments are hiding

There is a huge list of secrets the governments all over the world are hiding. Some of them suppose them to transfer money overseas. I’m not telling that any tool could solve all of them but there might be some reasons to put a transparency filter on the governments actions. Today I list here 13 actions that the government has made. More or less serious. More or less interesting. Hope you have fun.

 

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The 7 bad secrets about transfer money overseas the governments should keep hiding

1/ Sending money abroad is very expensive: 7.5% on average, according to the World Bank. I don’t care what they do the money with but people are paying the 7.5%. It’s atrocious.

2/ 7.5% of the amounts sent abroad represent not less than 30 billion dollars whereas using a comparison service would drive the cost down to 1.5%…

3/ Who is getting this money? Governments, banks and currency specialists. Who is paying? Us.

4/ There is no law against hidden fees in the financial market. There is no law against banks and fees they take without the consent of the customers. The only law that matters is the law of consuming. That’s why we, people, should keep analyzing the situation before buying anything from a bank. Let’s choose fintech startups.

5/ Most governments members transfer money overseas. They use fiscal paradises to put their money somewhere without tax. Sending money abroad is not forbidden but avoiding tax is.

6/ Sending money overseas is one of the slowest technology in the world

7/ There are transfers between the US and the middle East that are unidentified.

They will have to transfer money overseas in 6 cases

1/ Trump is elected. I think he is. But it was a joke, right? If not they will have to transfer their money internationally to keep it from him.

2/ Taxes. Just improve taxes and government members themselves will send their money abroad.

3/ Oil. Once the US need more oil the government will have to transfer a lot of money to pay bills. I would suggest to start being more ecological in our daily life to prevent this from happening.

4/ Gold. A lot of gold is bought by governments.

5/ Boats. Gold is imported via boats.

6/ Investments. There are strategic funds which invests in huge projects and companies. Transferring money overseas would become cheaper so that governments would be able to transfer less 😉

You see. Governments are more or less good at hiding things. It might help to hide from the people because then we will look mysterious and people love mysterious people.

However I wouldn’t recommend to keep hiding secrets because after a few years I will discover those secrets. There is no such Sherlock Holmes as me…