Top Ways to Transfer Money Internationally Without a Bank Account
Keeping your money as local as possible is a good strategy for managing your spending and saving habits. But it’s not the only one, nor even the most useful one if you want to transfer money internationally without a bank account.
If you don’t have a local bank account where you can store your money and use automatic payments or online transfers, you might think that transferring money internationally is impossible.
After all, how can you send cash to your friends or family outside of the country without a bank?
But thankfully, there are plenty of alternatives to bank transfers, like Wise, when it comes to sending money abroad. These methods are not only cheaper but also safer than using a bank account. Read on to discover some top ways to transfer money internationally without a bank account.
Why Using a Bank to Transfer Money Internationally Is Problematic
There are a few issues when it comes to using a bank to send money internationally: First is the high transfer fees.
This is a problem for both the person sending the money and the person receiving it. To send $1000 internationally with an average fee of $30, you’re effectively losing $970 in potential gain from that money.
If you’re the one receiving the money, you’re losing out on $970 in potential savings or investment returns. Secondly, some banks are reluctant to send money internationally. This is especially true if you’re below the age of 21 and don’t have a steady job.
Some banks might even require you to open a special account just to send money internationally. Thirdly, it can take a long time for funds to reach their destination. If you’re sending money to someone in a different country, that can take several days, if not weeks, to arrive.
Lastly, sending money from a bank account leaves a paper trail. It’s very easy for a criminal to trace your transfer and find out exactly where the money is kept. A bank might also be legally required to report any suspicious transfers to the police.
Transferring Money with a Currency Exchange Company
If you need to transfer money to a friend or family member who lives in a different country, you could do it through a currency exchange company. Let’s say you want to send $500 to a friend in London.
You could log into one of these websites and pay them $500 in USD. In return, they’ll send your friend the equivalent amount in GBP.
You can also do this in person at a currency exchange kiosk, but you’ll need to have the cash on hand. One disadvantage of this method is that the exchange rate of the day will determine how much your friend will receive.
But if you need to transfer money on a set date, you can always agree to transfer at a future exchange rate. When you transfer money with a currency exchange company, you’re not actually sending it from your bank account.
This can be good because it won’t be reported as a suspicious transfer to your bank. However, it does leave a paper trail since the company needs to know exactly who you are.
Transferring With an Electronic Wallet Company
Electronic wallet companies let you transfer money internationally and make purchases with just one card. They’re often linked to a bank account, but they also let you store cash on their app.
This gives you a traceable way to send money to friends and family who live abroad. Let’s say you want to send your sister $500. Log into your wallet app, and you can send her the cash through the app.
Let’s say you want to send your sister $500 from the U.S. to the U.K. This money will not actually go into her bank account. Instead, it will go into her wallet app. However, in order for her to access the cash, she’ll need to connect her wallet app to her bank account.
Transferring Through a Peer-to-peer Currency Exchange Platform
If you want to transfer money internationally but don’t have a friend who lives in another country, you can use a peer-to-peer currency exchange platform. With these websites, you can post an offer to buy a certain amount of a certain currency.
Other users will see this offer and accept it if they need the currency you’re offering. In other words, if you offer to buy $1000 in Chinese Yuan, someone living in China will accept your offer.
They will then send you their Yuan in exchange for $1000 in USD. Let’s say you live in the U.K. and you want to send $1000 to your friend in the U.S.
You can post an offer on a peer-to-peer currency exchange site to buy Chinese Yuan. Someone in China will accept your offer and send you their Yuan in exchange for your USD.
Transferring Through an Escrow Service
If you’re transferring money between two different countries, it can be hard to find someone in both countries who will accept your offer to exchange currency. A great solution to this problem is to use an escrow service.
Let’s say you want to transfer $1000 in USD to your friend in Florida. Your friend can’t accept your offer to buy Chinese Yuan because they live in the U.S.
You can post an offer on a currency exchange platform to buy British Pounds. Let’s say someone in the U.K. accepts your offer of $1000 in British Pounds. You send that person $1000 in USD, and they send you their British Pounds. That person will then take their British pounds and send them to your friend in Florida.
When it comes to transferring money internationally, the old adage “time is money” is especially true. So it’s important to choose the fastest and cheapest way possible to send money abroad.
Luckily, there are plenty of low-cost and fast ways to transfer money internationally without a bank account. They include using a currency exchange company, an electronic wallet app, a peer-to-peer currency exchange platform, or an escrow service.