/ Money, Travel & Leisure

Why is it so slow to send money overseas?

Recently, I sent some cash to a colleague in India as part of a Which? Money investigation. But what shocked me was the trouble he had getting hold of the ‘reddies’. So what is the best way to transfer money abroad?

Chances are, a fair proportion of us will want to send money abroad at some stage in our lives. There are a few ways to get this done – you can use your bank, a wire service or a specialist transfer service.

Our research found big discrepancies between what providers charge for sending money abroad, such as an £87 difference between the cheapest and most expensive when sending $1,000 to the US.

And if you need to get cash to someone in foreign climes post-haste, our research found that using a wire service, like Western Union or MoneyGram, was your best bet. We found they’re usually the fastest, completing transfers in minutes (providing there aren’t any problems). This is great, considering that other transaction suppliers can takes days. But, unfortunately, life’s not that simple.

Secure but slow

When I tried wiring cash to a colleague in Mumbai, it really did take minutes. However, my colleague couldn’t access the cash because the wire service had placed a block on the transfer. And why was that? Apparently, it was due to money laundering safety measures and concern over potential scams.

To be fair, I appreciate the need for financial providers to be vigilant and help in the fight against financial crime. But, if my colleague was in desperate need of cash, this hitch could have proven awkward.

What makes it worse is that I received no indication that there was a problem. It was only when the recipient couldn’t access the funds that the issue came to light. Surely a little warning might have been appropriate?

A balancing act

I might sound like I have a downer on money transfer operators – but I don’t. They’re just being prudent. But it’s still an issue, and one that doesn’t get currency transfer providers off the hook. After all, banks are everywhere. Most UK banks have an international presence, and even if they don’t, banks still talk to one another. So why does it take days to transfer money anywhere outside of Europe?

I think it’s about time that the money transfer sector caught up with the rest of the e-commerce world and enabled fast transfers, rather than including caveats detailing ‘typical’ timings. This way we could all rest assured that our cash would reach its destination in time. I think emails to the currency sender, asking for security clearance if there proved to be a problem, would also be a good idea.

Have you come across any problems when transferring money abroad? What are the fastest and slowest transfer times you’ve achieved?

Comments
Member

I’m not sure just how “globally-available” their services are, but I’m somewhat surprised that you haven’t made any mention of Paypal’s facilities for transferring money between individuals in different countries. OK, they might not always be the cheapest and it can still take some time to transfer money out to the payee, but I still think they should be mentioned!

Member

Completely agree – I have used Paypal for this purpose – it is not instant and it is not free – but it is easy to do provided both are on the internet and have e-mail.

Member
Stewart C says:
27 July 2012

I use a company called Oanda Global Transfer. It takes a little bit of setting up but they give the best exchange rates around. The exchange rate more than covers the transfer fees in comparison to any other method. Also if there are any problems they will email immediately, they also have on-line chat which answer your questions in minutes. Can’t recommend them enough.

Member
John says:
2 August 2012

Your article was helpful and timely as I am about to send money tomy daughter for her airline fare from Melbourne to visit us in the UK.

Is it possible to do better by buying the ticket in this country and sending it to her or are there IATA or other regulations preventing this?
John

Member

John,

AFAIK, it’s still the case that IATA rules stipulate that all air tickets must be purchased and paid for in the country of original departure. With internet, of course, you can remotely purchase and pay for a ticket for your daughter, but you’d have to do it on the Australian site of the airline, in your daughter’s name. Then, you would be effectively transferring the money to your daughter, but indirectly by paying with your card. Naturally, you’d be billed in $AUS, so you’ll also be hit for the currency exchange at card rates, but they’re usually comparable to what you’d be charged any other way.

The IATA rules MAY have changed since I last heard of them being as I’ve described, but I don’t think they have.

Member
Deborah Perkin says:
20 November 2012

I want to send money monthly to a friend in Morocco. She does not have a bank account. What is the best way to do it please?

Member
Adrian McTiernan says:
23 November 2012

I wonder if it might be easier if she could open an account at a bank, then there should be no problem, unless it is a cultural problem, perhaps? Or, could you open one on her behalf?

Member
Adrian McTiernan says:
23 November 2012

I use PayPal – I transfer money into my friend’s PayPal account now, and in about 15 minutes, it appears on his account, or his PayPal Credit card. Using PayPal, there are no unpleasant high charges, no worries about money laundering, and no-one even knows my bank details. I am aware that not many people know about this, but it is time they did. Please go and check the PayPal site – it is such a good system – I have used them for about 5 years, and would never go and try the bank for sending money, or use a cheque book unless I have to. I originally used it as a safe way to pay for Ebay purchases, but found out about transferring money quickly when a friend in America needed some dollars immediately, and I was able to have them with him in less than 30 minutes. You only need the email or name by which the friend is known to PayPal, and the process is done online in a few keystrokes.

I hope this is of help

Member
Adrian McTiernan says:
23 November 2012

Oops! – I forgot to mention that when using PayPal, both of you need to have a PayPal account, or PayPal Credit Card. It’s no good having just an email address, because it needs to be linked to your and the recipient’s accounts or where would they send the money? I hope this makes it clearer