Choosing an Online Money Transfer Service Provider in the US
The continued growth of the fintech industry in the USA has created a leeway to the adoption of digital banking among individuals and businesses. In the recent past, the inception of neobanks (digital-only banks) in America’s financial space has been received with a lot of optimism. More consumers, especially the millennials, have shifted from the traditional methods of moving money around into online money transfer services. With these services, you can run any financial transaction and money transfer on a smartphone, without having to visit any branch. Here is a highlight of everything that you should know about online money transfer services in the USA.
Online Money Transfer Explained
Online money transfer is the electronic movement of money across transfer agencies or banking networks around the world through a computer-based application or software. In this case, it is the data that represents your money that is exchanged between one online account and another.
How Online Money Transfer Works
Online money transfers operate with the help of Application Program Interfaces (APIs), which create a connecting platform between two different clients in the form of virtual bank accounts. One must, therefore, create an account or portal with an online money transfer service provider for them to transfer their money locally or internationally. Money transfer services provide you with diverse ways to transfer your money, each of which comes with charges and procedures. Some of these transfer methods include the following;
Your account comes with an e-Wallet that allows you to receive, send, and manage your money online.
Transfer from your bank account
Online money transfer services that are not purely digital often create a link between your online account and your bank account. You can, therefore, transfer money from your bank account to an individual or business using your online account. However, for neobanks, you will have to make all your transfers via e-wallets.
You can transfer money by visiting any of your service provider’s agent or shop.
Online Money Transfer Rates and Limits
The rate of online money transfers varies from one service provider to the other. These rates are also influenced by other factors such as the recipient’s location, the method of transfer, the currencies involved, and the amount to be transferred. However, most of the transfer rates are featured in the form of percentages in relation to the total amount being transferred. For example, for a service provider charging transfers at a rate of 5%, you will be charged $5 for every $100 transferred.
Online money transfer limits also vary with different service providers. For example, one service provider may require you to transfer a maximum of $6,000 in a day, while others limit you to a maximum of $3,000,000 and other varying amounts.
Online Money Transfer Times
How long it takes to transfer your money to an individual or business account will depend on several factors. Such factors include;
For example, it might cost you more to transfer money to a country in Asia or Africa than when transferring to the UK, Europe, and other regions within the US.
Method of Transfer
Using e-Wallets to transfer money may be much faster than when sending it from your bank account.
The amount involved
Large amounts of money take longer to transfer. This is because, due to increased money laundering, banks and financial institutions take time to verify the authenticity of such transfers.
What to Look for When Choosing an Online Money Transfer Service Provider
The progress of digital banking in the US has experienced significant setbacks as the incumbent banking forces maintain a status quo over the banking experience in the country. However, to choose from the few available online money transfer service providers, you should look out for the following attributes;
Terms and Conditions of Service
Financial services offered by an online money transfer provider can be at their worst when you discover some hidden costs and charges. A reliable service provider will have a clear stipulation of possible costs, fees, and rates in their terms of service structure. Therefore, always read the terms and conditions to see if there are any hidden charges for any online transaction you will make. Choose an online money transfer provider who is transparent with their charges.
Exchange rates significantly influence the total cost charged in making a transfer. Different service providers have varied exchange rates. Consider a service provider with the best possible exchange rates.
Reviews and Recommendations
Online reviews are not always reliable, but they can provide you with a snapshot of the kind of services you are about to subscribe to. Most importantly, you should check out for reviews from reputable institutions such as BBC, CNBC, or even Forbes.