4 apps to safely transfer money internationally

Among the 45 million immigrants living in the United States, many people face an unexpected problem: sending money to their motherland. Whether it’s repaying loans and bills, or helping your family, you’ll soon find out that the banking system is not on your side.

There is a lack of unified network connections among global banks. While some banks have established partnerships to simplify the process, overall, remitting hard-earned dollars to low- and middle-income countries can be particularly tricky, not to mention expensive.

In complex international remittance networks, the exchange rates used by banks are often very unfavorable to the remitter. This will automatically reduce the value of your funds, and the transfer fee in the receiving country may be as high as 10% to 20% of the amount of the remittance.

Thankfully, technology has found a solution—this time in the form of fast and inexpensive international remittance applications.

Remitly

Remitly was founded in 2011 and supports remittances to more than 100 destinations from the United States and 16 other countries (mainly from developed countries). Matt Oppenheimer, co-founder of the app, experienced many inconveniences of international remittances while working for Barclays in Kenya, so the app focuses on covering small African countries such as Côte d'Ivoire and Liberia.

Remitly provides bank accounts and mobile wallet remittance services, which are usually cheaper than bank remittances. It also provides cash withdrawal and cash delivery services, depending on the availability of the country of collection. The platform covers most major banks and supports mobile wallets extensively.

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In mid-July 2021, we tried five different currencies for three consecutive days, and Remitly's US dollar foreign exchange rate averaged 2% lower than the real-time exchange rate on the CNBC information board. This means the app offers a slightly lower dollar value than the forex market. For example, if 1 USD is worth 743 Chilean pesos in these markets, Remitly will only offer 729.30 pesos.

Remitly's transfer fee is usually less than 5% of the transfer amount, but it varies depending on the type of currency and whether you pay with a bank account (economic) or card (fast). For example, using Chilean peso, remit $1,000 in US dollars, the economic model fee is $2.49, and the fast model fee is $20. The transfer method you choose will also determine how long it takes for your funds to arrive at your destination, which can take several minutes to a working day.

Remitly is available for free on iOS and Android and on the Internet.

Wise

Wise was originally launched in 2010, called TransferWise, and currently has approximately 10 million users worldwide. The platform allows you to send international money from the United States, the United Kingdom and Europe to over 80 countries, many of which are located in Eastern Europe.

If you've been following the forex market, a key feature is that you can hold different currencies in the app's digital wallet to convert it into US dollars when it's most convenient — and vice versa.

Wise also generates local account numbers so you can send and receive payments in 10 different currencies just like you do local transactions.

Wise covers a wide range of coverage and allows you to send money to almost any bank, but it does not provide cash withdrawals or payments to utility bills or mobile wallets. But the platform has shortcomings in terms of services and has performed well in terms of foreign exchange rates. We compared five different currencies, and Wise offers the highest dollar value each time. For example, if 1 USD on the CNBC information board is worth 5.26 BRL, Wise will give the same price.

Wise's handling fee is usually less than 5%, and the larger the transfer amount, the lower the handling fee. For example, if you send $100 to Peru, the handling fee is $4.37 (4.4%), while sending $1,000 to the Philippines costs $6.60 (0.7%).

Lastly, like Remitly, the speed at which your funds circulate globally depends on the country of receipt, ranging from minutes to three working days.

Wise Free to use on iOS, Android and the Internet.

WorldRemit

WorldRemit allows you to send money from the United States and 49 other countries to over 130 destinations. Similar to Remitly, the app has considerable influence in Africa and allows you to send money from six countries on the continent.

This platform provides banking and mobile wallet remittance, mobile phone recharge services and utility bill payment services. Cash withdrawals are also available, but WorldRemit covers fewer major banks than other applications on the list.

After using five different currencies for three consecutive days, WorldRemit's exchange rate averaged 1.6% lower than the real-time exchange rate shown on the CNBC dashboard. So if 1 dollar is worth 20 Mexican pesos, the app will quote 19.70 pesos, making it the second best choice for exchange rates among the four apps.

Similar to Wise, WorldRemit's transaction fee is less than 5%, and for amounts of $1,000 or more, the fee will drop to less than 1%, depending on the currency. In terms of speed, the platform can send your funds around the world in minutes to hours. You will mostly see the same-day transaction, but as in most cases on this list, it will depend on the country of receipt.

WorldRemit Free to use on iOS, Android and the Internet.

Xoom, a product under PayPal

Xoom entered the market in 2001 and was acquired by PayPal in 2015. At that time, it had more than 1 million global users. Now, the app has become part of a larger infrastructure serving over 250 million users, so this might be a good choice if you use PayPal. Xoom can be used to make international remittances from 32 markets in the United States, the United Kingdom and Europe to 160 countries including small island countries such as Seychelles and the Dominican Republic.

Xoom provides bank transfers, cash withdrawals, utility bill payments, mobile recharges and mobile wallet transfer services. Bank coverage is limited, depending on the country you send, so be sure to check the list to see if the recipient's financial institution is in it.

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Xoom makes money by currency exchange, so its exchange rate is the most expensive on this list. Using five different currencies, Xoom's exchange rate shows the lowest value per dollar in four apps. So if 1 dollar on the CNBC information board is worth 50.24 Philippine pesos, Xoom will exchange rate at 48.16 pesos, which means a loss of 4%.

But even if the exchange rate is not Xoom's strength, its real benefit is the handling fee. In four different currencies, the handling fee for a $100 transfer ranges from $1 to $5, which is usually fixed, regardless of the amount you send. In fact, transfers over $100 in currencies such as Mexican peso or Philippine peso may be free.

If you are in a desperate need to remit funds to your destination, Xoom may not be the best option for you – depending on the delivery method, the platform can take up to two business days to reach your bill.

Xoom Free to use on iOS and Android and on the Internet.

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