Transferring money internationally can be very frustrating and prohibitively expensive. It does not have to be though. In this article, I explain how to efficiently and cheaply transfer money between accounts / to third parties.

 

International bank

Large international banks usually allow their customers to transfer money between their accounts for free or at a discounted price. Citibank and HSBC are the best ones, especially if you qualify for Citigold or HSBC Premier.

My strategy here is simple, when I open a new bank account in a country I also open a local Citibank account and link that account to my Global View of Accounts (on the Citibank online banking). I can then transfer money from my existing Citibank accounts in any countries for free and instantly to my new account.

I will give you an example: I opened a DBS account in Singapore and a Standard Chartered account in Hong Kong. I also opened Citibank accounts in both Hong Kong and Singapore. When I want to transfer money from Hong Kong to Singapore I send a local transfer from my Standard Chartered account to my Citibank HK account. I then use the free Citi Global Transfer functionality to send money to my Citibank SG account. I then send a local transfer from my Citibank SG account to my DBS account. Total cost? 0$.

You can also use this method to pay third parties (suppliers, business partners…). In this case your setup would look like this: Your bank -> Citibank (your country) -> Citibank (Destination country) -> Third party’s bank.

 

Money transfer service

If you only need to transfer small amounts (<5000$US), using a money transfer service may be your best option. TransferWise is my favorite service, they are cheap and very reliable. They allow you to fund transfers via a credit or debit card and their rates are very competitive. WorldRemit is another good option, especially for micro-transfers. Many transfer services also allow you to transfer money to mobile phone accounts (useful for keeping your SIM cards active). If TransferWise or WorldRemit aren’t available in your country, Western Union may also be an option.

Interested in sending money to Australia? Have a look at sendmoneyaustralia.com for the best information and quotes. There are thankfully tons of services available unlike in less developed countries such as Nigeria.

 

Bitcoin

Using Bitcoin can allow you to circumvent capital controls or geographical restrictions. You can find local sellers on LocalBitcoin.

Two useful potential setup:
1. Cash -> Bitcoin (via local seller) -> Spend bitcoins online
2. Cash -> Bitcoin (via local seller) -> BitPay/Coinbase (Bitcoin merchant account) -> Your bank account

I do not recommend using Bitcoin if you have other options available because of it’s high volatility and large spreads. If you do decide to use Bitcoin, I recommend reading this Wikipedia article first.

 

Wire

This is the most popular method used to transfer money internationally. In many cases it can be expensive and inconvenient, especially if you have to physically visit your bank to initiate a wire. SWIFT and SEPA transfers are monitored by the EU and the US for tax evasion so this method of transfer can also be risky depending on your setup. If you decide to rely on the SWIFT or SEPA system for your transfers, I recommend opening an account with a bank that offers free wires.

 

Use actual cash

Using actual cash may sound like a strange money transfer strategy but in some cases it can work pretty well. If you travel regularly between your business locations it can make sense to carry cash on you. Same thing if your business locations are close-by (Hong Kong and Shenzhen for example). In some cases (undeclared income for example), carrying cash may be your only safe option. Keep in mind that in most countries you will have to fill a tax declaration form if you are carrying more than 10000$US equivalent.

 

Merchant account

Using a merchant account as a mean to transfer money internationally is both unusual and expensive but can be very useful in some circumstances. For example, you have an undeclared corporate offshore bank account and you want to transfer funds into it. You obviously can’t send a wire transfer or use a money transfer service and moving actual cash around is too expensive (travel costs). In such a situation you could open a merchant account for your offshore corporation and link it to your offshore bank account. You could then invoice yourself the amount you wish to transfer and pay the invoice with a credit/debit/anonymous gift card. If your company is properly setup, such a transfer will leave no obvious traces. This is a last resort method though as such a transfer can be expensive (2-3%) and resource intensive (merchant account maintenance).

 

Debit card

Using debit cards to move money around can work nicely if you or a trusted associate are physically present in the destination country. You or your associate can simply withdraw cash from an ATM using the card and deposit it locally. You could also provide a debit card to a third party to whom you frequently send money. You would then only have to reload the card and they would gain immediate access to the funds.

For example: if you bank in the United States but live in Malaysia, you could get a no ATM/FX fee bank account in the US and draw cash from that account using a debit card in Malaysia. You could then either spend the money or deposit it in a local Malaysian bank account.

 

Freebie

Sign up for a TransferWise account today using my referral link and get your first transfer for free. TransferWise is the best way to move money between your bank accounts internationally.

  • P

    People have difficulties to compare exchange rates of banks and alternative services. So simply compare the rate with what’s on google and calculate how much they charge. HSBC in HK just had a rate roughly 1.9% worse than google – just to give you an idea …
    At the moment GBP to HKD is 10.07 on google … PayPal is1 GBP = 9.76419 HKD, so that’s 3.1% worse
    the other way around PayPal would give 1 HKD = 0.0970773, that’s 2.2% worse than google

  • P

    People have difficulties to compare exchange rates of banks and alternative services. So simply compare the rate with what’s on google and calculate how much they charge. HSBC in HK just had a rate roughly 1.9% worse than google – just to give you an idea …
    At the moment GBP to HKD is 10.07 on google … PayPal is1 GBP = 9.76419 HKD, so that’s 3.1% worse
    the other way around PayPal would give 1 HKD = 0.0970773, that’s 2.2% worse than google

  • P

    Now transferwise would pay
    986.80 HKD for 100 GBP
    10,019.25 HKD for 1000 GBP
    100,193.05 HKD for 10000 GBP
    so that’s say around 0.5% worse than google, saving you around 1.5% or GBP 15 for 1000
    just it only makes sense if you at least exchange 4 digit EUR GBP or USD amounts.

  • P

    Now transferwise would pay
    986.80 HKD for 100 GBP
    10,019.25 HKD for 1000 GBP
    100,193.05 HKD for 10000 GBP
    so that’s say around 0.5% worse than google, saving you around 1.5% or GBP 15 for 1000
    just it only makes sense if you at least exchange 4 digit EUR GBP or USD amounts.

  • YOLO

    so whats the most cost efficient way then?

  • YOLO

    so whats the most cost efficient way then?

  • It really depends on the amount. Up to around 300$US, services like PayPal are competitive due to having no set transfer fee. Over 300$US, services like Transferwise usually make the most sense due to having better exchange rates.

  • It really depends on the amount. Up to around 300$US, services like PayPal are competitive due to having no set transfer fee. Over 300$US, services like Transferwise usually make the most sense due to having better exchange rates.

  • shady mohamed

    i have question please can i fund my Payoneer account using transferwise

  • shady mohamed

    i have question please can i fund my Payoneer account using transferwise

  • Unfortunately no, the transfer will be rejected. You can only fund your Payoneer account using one of their approved sources.

  • Unfortunately no, the transfer will be rejected. You can only fund your Payoneer account using one of their approved sources.

  • Bowling

    Considering that I am in the EU and would like to make a transfer between two of my accounts in different countries with TransferWise, could this be monitored from my origin country where that money has been transferred to? Would they know that the funds has been transferred to me? Thnks

  • Hi Bowling,

    Yes they will know that you have received the funds. TransferWise reports transactions to all the countries it sends from / to. Your bank also reports on your transactions.