Money Transfer Services

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As the name implies, money transfer services offer the facility to transfer money to another person or business which may be on the other side of the globe, usually within minutes. Money would be handled by large international companies which would have their local agents receiving money in cash or instructions to debit a card from remitters in person. Usually, money transfer services do not involve banks and monies are not sent to a bank or deposited into an account.

The person sending the money (“the remitter” or “sender”) needs to provide name and address, the recipient's name, and a designated payment destination. The agent would usually provide the remitter with a 10-digit or similar number that must be transmitted separately by the sender to the recipient. The recipient then goes to his/her agent office in the designated payment location, presents the said number and identification such as passport or ID card for retrieval of funds.

Retrieval is quite easy. However if the recipient lacks the necessary identification documents, the remitter and recipient of the money can usually set up a pre-arranged password or secret question and answer which can be used to release the funds.

Usually, a remitter would need to pay cash to the transfer agent to process a money transfer service. Cheques are not normally accepted. There may be some instances where the agent would not accept payments by card (debit or credit card).

Funds are normally paid out to the recipient in cash, although if payment exceeds a local maximum threshold or cash on hand, a cheque is issued. Thus it is important to check the cash limit at the destination location.

There are a variety of reasons for using these services for example to transfer money following the purchase of items or services from abroad, sending presents to a relative domiciled abroad or sending emergency funds to family, friends or colleagues abroad.

Of course, these services are subject to fees which differ based on the originating and receiver countries and the type of transfer. Generally, fees are less if the website is used rather than when going through an agent if this service is offered in that country. The fees must usually be paid by the sender immediately at the time money is sent. Fees vary between companies so it’s important that these are compared prior to affecting the transaction.

If you are using a money transfer service to pay for an item, fees may be charged directly to the merchant, rather than the purchaser/sender of funds. Always check with both the service provider and the merchant regarding fees and who is required to pay and how much.

There are several advantages in using these services which include:

  • These services are quick with the money being usually transferred and accessible within minutes of the transaction.

  • It is easy use the service since it just requires the person either sending or receiving the funds to go to any of the company’s offices and complete a form.

  • It is convenient since the payments are handled by large companies which would have agents in almost all countries in the world. Some companies may also allow a remitter to order a money transfer service online (rather than visiting the office of an agent).

  • It is available to everyone as there is no need to have a bank account or credit card; also an account with the money transfer company may not be required.

 

Users of money transfer services need to be aware of the following:

  • Be sure to know the person you are sending money to and only make purchases from trusted sources. These services are a great way to send money to people you know and trust. Money transfers should not be used when sending money to a stranger or someone whose identity you cannot verify.

  • Take extra caution if you are buying or selling items and liaising with foreign sources, especially when amounts involved are considerable and the website, magazine or source of purchase are not known and/or reliable.

  • If you are using one of the agents acting for one of the international money transfer companies, always check that he/she is an authorised agent, especially if you are transferring money from abroad. Most service providers have an agent location function on their website.

  • If an offer sounds too good to be true, it probably is. This might include sending money after winning a ‘lottery’ or paying a fee to have money transferred to your account without rendering a service. Unfortunately, these services are used by fraudsters -so beware and make sure you are confident as to whom the recipient of the funds will be.

  • Always check the fees applicable before transferring the money. There might be both fixed and minimum fees and variable fees which vary according to the amount being sent. Fees are usually paid by the sender (depending on the type of service you are using and are non-refundable.

 



Last updated: Sep 07, 2016