A complete guide to international money transfer

How does an international money transfer work?

An international money transfer sends funds from one country to another through a bank, app, or wire service, then converts them into the recipient’s currency. More firms now hire talent abroad, so this process matters more than ever. Here is the short version:

• You send money across borders using a bank, app, or wire service.
• The amount is converted at the current exchange rate.
• Fees and speed change with each provider, so compare before you send.

As more firms hire talent from other countries, an international money transfer becomes vital. Businesses must weigh a few things first. These include exchange rates, transfer fees, and getting the money through on time.

Keep reading to learn how the process works and which service is the best for you.

How does international money transfer work?

An international money transfer sends or receives money between two countries. For example, US employers with Filipino staff must pay them in pesos. So they use a bank or a money transfer app. In most cases, transfers take a few days to reflect on the receiver’s end. The exact time depends on the service you use.

Steps to make an international money transfer

Transferring money abroad is fairly simple. Still, some methods take longer than others. Here is how the process works with a money transfer app.

1. Gather customer information

First, note the recipient’s details. This means their name, account details, the amount you owe, and the currency. In some cases, the recipient must show ID or documents before they get the money. However, this depends on the provider’s rules.

2. Check exchange rate and fees

Next, check the exchange rate. This rate matters because every country uses a different currency. Also, these rates shift often. If you pay staff in the Philippines, one US dollar is equivalent to around 56 PHP. This may be higher or lower in the future.

Depending on the provider, you may pay conversion or service fees before you send. So choose the option with the lowest fees. This is a key part of any smart international payroll plan.

3. Transfer amount

Once you have the details, you can start the transfer. The app will ask you to input the needed information. All details then come to you by email. Processing may take a few days, based on the provider. Finally, the money is converted into the recipient’s currency.

Choosing the best international money transfer method

Below are the main international money transfer methods you can try. Each one has its own perks.

Online money transfer

The easiest and most common method uses a third-party service. Examples include PayPal, Venmo, and Wise. The process is simple and almost instant. You just input the recipient’s details and the amount. Still, the fees vary by service and amount. In most cases, the money reflects within a few hours to a few days.

Online wire transfer

An online wire transfer moves money through a bank-run network. The sender pays upfront at the bank. They also give the recipient’s details and the reason for the transfer.

The documents move from the payer’s bank to the recipient’s bank. Systems such as SWIFT or Fedwire keep the money secure and on track. Once the recipient’s bank has the details, it deposits the funds. However, the process may take a few business days.

International money order

An international money order is a paper document bought for the amount you want to send. You then bring it to the post office and mail it. The recipient can exchange it for cash once it arrives.

This method is rather old, especially with the rise of apps. Still, it is safer than mailing cash. You are sending a document that states how much you pay. It also needs no bank account to send or receive. Since it moves as normal mail, it lands in the recipient’s mailbox.

However, this method is very slow and dated. So the recipient waits much longer. The same rules apply too. You must still weigh the exchange rates and issuing fees.

Bank drafts

Bank drafts are a type of check whose payment the bank guarantees. Here they are foreign drafts, since you pay abroad. Suppose a US employer wants to pay a Filipino worker. First, the employer goes to the bank and issues a draft for a set amount. That amount is held until the payee cashes it out overseas.

The employer then sends the draft to the Philippines, already converted to pesos. Once it arrives, the worker brings it to a local bank and cashes out the same amount. So a bank draft keeps money safe and prevents bounce checks. It also makes sure the payee gets the full amount. As a rule, this method suits larger payments, such as a car or house, but it works for small ones too.

Best international money transfer services

There are many money transfer apps to choose from. Each one has its own fees and speeds. Check out the options below to find the best service for you. This choice also shapes how well you pay and manage remote talent.

PayPal

PayPal is a long-established platform that makes sending money easy. It works for small transfers and needs only the recipient’s email. Creating an account is free, and it works in 200 countries, including the Philippines. However, one downside is its high fees, which can reach 4.5%. If you want to skip high fees, you can pick a PayPal alternative instead.

Wise

Wise is a great choice for small, fast transfers with low fees. It reaches up to 70 countries and offers fair exchange rates. You also get options like wire, credit, or debit card transfers. Best of all, your recipient does not need a Wise account to get the money.

Western Union

Western Union is flexible. It lets you send money four ways: online, over the phone, through the app, or at a branch. It also allows a cash pickup, which helps when the recipient has no bank account. So the cash drops off at a branch and gets picked up there. The downside is that its fees run high and shift with the country and other factors.

MoneyGram

MoneyGram is a solid choice with over 300,000 locations worldwide and low fees. So it suits fast transfers and urgent needs. The app is easy to use, and transfers finish the same day. It also lets you send to users with no bank account. However, it has a rate markup of 3% or more and a $10,000 cap per online transfer.

OFX

OFX is ideal for large transfers. It has no maximum amount and no fees. Still, it has a minimum spend of $1,000, sent from the app or website. It does not allow credit card or cash transfers, so it sticks to bank accounts. On the plus side, bank accounts are safe and low-risk. The one drawback is that it runs slower than other services.

WorldRemit

WorldRemit is an affordable option with low fees, around 1% to 1.5%. It offers instant transfers with debit cards or bank accounts. The money converts into the recipient’s currency right away. However, it caps transfers at $5,000, so it is not ideal for business. Instead, it works best for quick, peer-to-peer transfers.

Making international money transfer easier

An international money transfer is vital for firms that manage overseas Filipino workers. It lets employers pay foreign staff quickly. Beyond salaries, it helps businesses run teams abroad and fund their goals.

Still, some challenges are hard to avoid. These include high fees, shifting rates, and slow transfers. So leaders must weigh these drawbacks and find the safest way to pay their staff. Many also pair transfers with payroll outsourcing or global payroll software to keep payments smooth.

Frequently asked questions

How long does an international money transfer take?

It depends on the method. Apps can move money within hours or a day. Wire transfers and bank drafts often take a few business days.

What is the cheapest way to send money abroad?

Low-fee apps like Wise and WorldRemit are often the cheapest. Still, compare the exchange rate and fees each time. A small fee gap can add up on large transfers.

Do I need a bank account to send money overseas?

Not always. Services like Western Union and MoneyGram allow cash pickups. So the recipient can collect the money without a bank account.

Is an international money transfer safe?

Yes, when you use a trusted provider. Banks and licensed apps use secure systems like SWIFT and Fedwire. Always check the provider’s rules before you send.

How do businesses pay remote workers abroad?

Most use transfer apps, wire transfers, or a payroll partner. This keeps staff paid on time and in their own currency.

Key takeaways

• An international money transfer moves funds across borders and converts the currency.
• Exchange rates and fees change often, so compare providers before you send.
• Apps like Wise and WorldRemit suit small, fast transfers with low fees.
• Wire transfers and bank drafts fit larger, secure payments.
• Payroll tools and partners help businesses pay remote staff on time.