The Cheapest Way to Send Money Internationally

This post was originally published on June 17, 2014. I’m updating this post to include TransferWise, which is, for my hard-earned money, the cheapest way to send money internationally. Mentioned in this article in a prior version was Intuit PaymentNetwork, which was discontinued on June 30, 2016.

cheapest way to send money internationally, U.S. and foreign currencyOkay, so you want to send money abroad. If you’re like me, you send payments to vendors in other countries. But international transfer fees really cut into the bottom line.

Enter TransferWise. The company has attracted some serious investment ($25 million) from people like Sir Richard Branson and claims that it can save you 90% of what you’d normally pay your bank to handle the transfer.

I’ve used it personally and have recommended it to my company’s international vendors.

So am I shill for TransferWise? No, in fact, there are situations (when you’re sending large amounts of money, for example) when TransferWise’s fee would exceed your bank’s flat fee for international transactions.

But TransferWise is simply the cheapest way to send money internationally for amounts of less than, say, $5,000.

The Cheapest Way to Send Money Internationally

Top Pick

Let’s say you live in the U.S. and want to send $1,000 to a vendor in the UK. You’d pay only $9.90 if you used TransferWise. Compare that to $44.30 if you used PayPal.

Cost: varies by transaction amount and destination country. Minimum fees apply. (Check out the convenient front-page fee calculator at TransferWise.)

When to use it: when you want to save money

When to avoid it: almost never!

Other Options

PayPal typically charges recipients, not senders. But no vendor likes having 3.9% deducted from her project fee. Become a hero to your vendors by telling them about the cheapest way to send money internationally.

Cost: varies by country; can be as much as 3.9% of payment amount plus a flat fee

When to use it: when payments are small

When to avoid it: when payments are very large

Bank transfer
Banks charge a flat fee for transfers. For very large payments, this can be advantageous because the fee (Bank of American charges $45) ends up being less than what you would pay a broker that charges a percentage. For very small payments, however, the fee in percentage terms is just too high.

Keep in mind that many banks charge both the sender and the recipient. That’s great for the banks, bad for you.

Cost: varies by bank (see Citibank’s fees schedule here)

When to use it: when payment amount is very large (in the thousands of dollars)

When to avoid it: when transfer amount is small

Western Union
My advice? Avoid Western Union like the plague. I have used it twice (once for a client, once for a vendor), and it was two times too many. The process is not intuitive, the service is expensive, and the customer service is poor.

Cost: varies by country; it cost me $150 to send $1,500 to Mali

When to use it: when no other option is available (extremely remote locations; countries with low political/economic stability)

When to avoid it: as often as you can