The World’s Top International Money Transfer Providers by Volumes
Technological innovations and globalization have expanded the reach of international companies and boosted trade volumes. It is no surprise to see a rise in international money transfers and demands for such services. Hundreds of thousands of international payments take place every second for business-to-business payments. According to the world trade organization, global trade and international e-commerce transactions have already crossed 15 trillion dollars.
As the digital race heats up between the service providers of international money transfers, the transfer services are only attracting more competition and online channels across the world. Thus, one is witnessing new systems integrations, partnerships, and cross-border functionalities in the industry along with regulatory advances.
Despite the large number of international payments linked with international trade and commerce, the process of transferring money across borders remains extremely complex. Today, sending money abroad is seen as an arduous task which is further exemplified by manual paperwork and lack of transparency regarding international payments. The absence of any standard laws and regulations regarding international payments only adds to the complexities of international transactions.
Traditionally, governments, larger corporates, and banks have enjoyed direct access to the institutional foreign exchange market that exchanges $4.8 trillion of transactions each day. Still, banks and corporates are losing more and more clients who need to conduct an international money transfer due to several issues that exist within the banking industry.
Common issued faced during international money transfer
Both importers and exporters face certain issues when dealing with international payments, such as:
Hidden costs – Companies and businesses are paying a lot more to receive their own payments because of the hidden fees involved with each transaction.
Higher exchange fees- Banks often charge a premium on foreign exchange, which is much higher than the mid-market exchange rate.
No way to track- Payment tracking is often absent for transferring money globally, and one has no insight about when their payments will get delivered.
Possibilities of fraud – There is always a possibility of scams as con artists are always looking for vulnerable victims and can convince them to transfer money to a stranger in a foreign country.
Thus, lack of transparency, poor exchange rates, fixed wire fees, and lack of particular expertise in this field are some of the key issues that relate to international money transfer services.
Banks are facing the highest pressure as they are seen as the most expensive money transfer providers internationally in emerging markets. When compared to other Money transfer operators, they charge an average cost of 11.0%, as compared to 6.1% by the financial companies, according to World Bank Q3 2017. It is normally hard to compare and understand the true costs because of the lack of transparency in the pricing structure of the banks.
Customers are left with little choice other than to research all options available and compare the best international money transfer rating of top companies. Luckily there are a few names, such as TransferWise, that have stepped in to fill the gaping holes in the international money transfer system and make things easier for the customs by providing a built-in price comparison of multiple traditional banks and brokers.
TransferWise – A trusted name
TransferWise is a trusted name when it comes to international money transfer services and is among the top ten international money transfer services. Renamed Wise in 2021, TransferWise offers the cheapest and fastest way to send money abroad. The ten-year-old company now serves over ten million customers worldwide through 54 currencies across 2,500 routes.
The philosophy behind transferring money through Wise is its affordability and transparency. Over the last decade, TransferWise has offered business solutions across its business-to-consumer, or B2C platform. The fintech company is also creating strong partnerships with a number of banks like French bank BPCE, Estonian bank LHV, and UK neobank Monzo, among others, to expand its B2B reach.
TransferWise posted a fourth straight year of profit for the fiscal year ending March 2020. Its net profit more than doubled to £20.4 million from £10.1 million, and annual revenues grew to £302.6 million, up 70% from £179 million as compared to FY2019. The financial year 2020 also saw the debit card and borderless account reach the US, New Zealand, Singapore, and Australia, and as of now, TransferWise holds over £1.97 billion in customer accounts.
Part of the company’s growth can be attributed to the launch of the company’s “borderless bank account” for its customer base of freelancers, ex-pats, and travelers in different markets. The customers know exactly how much they need to pay as the company uses real exchange rates are there are no hidden costs.
Moreover, the upcoming Wise IPO, to be managed by Goldman Sachs and Morgan Stanley, has just gone through. This could raise the value of the company to an all-time high of £5 billion.
In the challenging money transfer race, Wise has its fair share of competitors. While many of these adversaries adopt reduced fees as their main selling strategy, there are a number of different services too that set them apart.
Best International Money Transfer Services
If you have been using TransferWise, you may also consider some alternatives to find the best possible international money transfer solution. Here are the top international money transfer services.
Western Union – Receive money in cash Western Union has established a worldwide network of over half a million agents in every nook and corner of the world. With an annual turnover of over £80 billion, Western Union has the highest volume of transfers, with an average of 31 secure transfers taking place every second. Although the conversion fee of 1-3% is rather high, customers prefer Western Union as they can get their payments in cash.
Xoom – Non-banking transfers Xoom is a much better option for international transfers if the recipient has no bank account. Moreover, Xoom supports easy utility bills and cash payments and sends regular text messages about the status of your transfer.
XE Money Transfer – Best for businesses XE Money Transfer, regulated by the Australian Securities and Investments Commission, handles money transfers online and over the phone. While there is no limit for over the phone, there is a cap of £500,000 on transactions done online. The downside is that XE only permits bank-to-bank transfers and no cash pickup.
MoneyCorp- Specialist forex service and guidance MoneyCorp operates 24×7 and takes care of all your currency needs through their secure online platform, which is fast and simple to use. The fintech company can provide specialist forex services with a dedicated account manager and is known for professional customer support.
OFX – Best remittance and money transfer software OFX software is used for transferring and managing funds between companies and their customers. Conversion fees range between 0.5 to 1% and can be low for large transactions and some currency pairs.
Currencies Direct -Specialized forex solutions Currencies Direct scores above all its rivals as it allows for easy integration with popular online marketplaces. There are options for GBP and EUR debit card payments from the UK and the European Union.
WorldFirst – Best for UK residents WorldFirst is a reputed international money transfer company with fair and transparent pricing of 0.5% or even less. As an alternative to the borderless account of TransferWise, the service provider allows the transfer of funds in foreign currencies through local virtual receiving bank accounts.
AFEX – With an enormous reach AFEX is a secure 24×7 trading platform that is a staple in the international money transfer market. You can pay by cheque, wire transfer, and direct debit and consult their highly rated team of experts for questions about the FX market or the services provided by AFEX.
AirWallex – Up and coming, corporate only AirWallex is a relatively new Melbourne-based fintech startup that takes care of P2P money transfer services as well as the B2B market. It offers international payment solutions for all types of businesses.
There is no doubt that the landscape of international money transfer tomorrow will look very different from how it does today. In the future, one can expect more efficient, remotely secure, and automated models working for the bank and non-bank institutions and improve the services. Only the best international money transfer services that are trusted, transparent, secure and, offer convenient and multi-choice aspects for online payments will survive. Simpler regulations and fair practices in global trade and payments are likely to remove all hassles and negativity associated with money transfers across the world.