Money Transfers
Do you have money or a payment that needs to be sent or received? Maybe it's money for family overseas, money to pay for a bill, money coming in from another country. Money transfers happen all the time and they don't always go as planned. In fact, money transfers can go wrong in ways one cannot imagine unless you know exactly how money transfer services work. The first aspect of money transfers is studying up on common terms used by money transfer companies:
Wire Transfer
A wire transfer is a money transfer between two parties. A wire transfer can be sent to any country in the world and money goes over wire transfers within hours, sometimes even minutes depending on how much money is being transferred.
Correspondent Bank
The correspondent bank receives money for money transfers between different countries.
SWIFT Code
Swift codes are used by banks to identify themselves to other banks when transferring money internationally.
Direct Deposit
This money transfer service is when money gets sent directly into the bank account of the receiving party.
Exchange Rate
An exchange rate is the ratio of the values of two nations' currencies.
How is Money Transferred?
1. Funds Availability
The person placing the order decides what type of transfer they want, whether it's an electronic fund transfer, money order, or certified check. That money is then electronically debited from your account and given to the money transfer company you're working with.
2. Currency Conversion
The money is either converted into the currency of where it needs to go or in some cases, money may be wired in its original currency and then converted when received by the money transfer service.
3. Transmission
Finally, money goes through a process called transmission where money is sent to correspondent banks who send money on the receiving end over their secured networks that are linked together across borders using SWIFT codes.
You can see just how many steps there are in a money transfer between two people when one party lives here in America and the other party lives outside of this country. To avoid money going missing in a money transfer you need to know who the person sending money is and where they live, where the money is going, what type of money transfer service is being used, and how much money is being sent.
Money transfers over currencies present their own unique difficulties as well with foreign exchange rates fluctuating on a minute-by-minute basis and money transfer companies using money in the account with which to fund money transfers. It's important when doing money transfers between two people that you don't use wire transfers; instead, find a money transfer company with low fees and good customer service.
Maybe you're moving money for your business or transferring money from an inheritance. Money transfer services make it possible for anyone in the world to easily move money from one person to another even across international borders without having too great of a cost attached to it. With just a few clicks on your computer screen, you can send money quickly over secure networks of money transfer companies around the world.
Frequent Questions
Are you thinking of transferring money to a company or an individual? Then read these 8 money transfer questions to find out how to send cash quickly, and safely.
How much are money transfer fees? The fees by the company vary, but money transfer fees can run as low as $1 and go up to 20% of the money sent if money is sent to a country outside of their network.
How long does money take to transfer? It can anywhere from a few minutes to a day or two depending on the money transfer service and whether money is being transferred domestically or internationally.
Where does the money go? Money goes to money transfer services and their partner banks located in both the sending and receiving country. Money may be sent across international borders without going through government agencies, but it also means that your money could potentially get lost if you were to send money to someone who's third-party was hacked or used by criminals.
How do people get scammed with money transfers?
People often get scammed when they use third parties like friends of friends instead of money transfer companies because there are no consumer protections for customers using those types of services.
What money can be transferred?
Money can be transferred in money orders, certified checks, wire transfers, electronic funds transfers, and direct deposits.
How do money transfer recipients collect money?
The money is delivered to the money transfer recipient by money order, direct deposit, or check. Recipients may be able to pick up the money if the transfer service has locations or services where they live.
What if the Money Goes Missing?
If money goes missing for any reason after a money transfer has been completed, both parties have some recourse against their money transfer company for lost money. In some cases, people will use third parties to make money transfers between two different countries which can lead to issues down the line if one of those third parties got hacked or used by a criminal organization.
Things to Consider
- Taking money out of your money market account or retirement fund may incur fees because you're taking money out that may profit from an investment.
- Money may only be sent to certain destinations depending on the country in which they live and what types of money they use like Euros.
- Be sure to check with your money transfer company whether there are different fees for sending money to different countries.
- To avoid issues after a money transfer is complete, know who and where you're sending: - about who you're sending money to and where they live - what type of money transfer service is being used - what currency the money is going in or out of; sometimes it's converted when received by the money transfer service.
Conclusion
Overall, wire transfers are a very safe and secure way of transferring money. They offer anonymity and flexibility when it comes to the amount of money being transferred. However, their availability can be an issue in certain parts of the world. Additionally, bank wire transfers may have higher fees than other money transfer services but they do offer more detailed information about the sender and receiver.
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