How to Send Money Online

Spencer Tierney
By Spencer Tierney 

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You can send money around the world in a matter of minutes, but you don’t want your transfer to cost you in steep charges or delivery delays. Here’s a guide for U.S. residents who wish to send money online either within the country or abroad.

Steps for sending money online

  1. Choose a provider based on speed, cost and delivery options

  2. Sign up for an account on a provider’s website or mobile app

  3. Provide details for payment and identification

  4. Confirm details and send transfer

  5. Track your transfer’s progress

1. Choose a provider based on speed, cost and delivery options

Sending money online means you’ll be using a money transfer provider’s website or mobile app, but you'll first need to decide which provider to use. They range from banks to money transfer operators like Western Union and Xoom. To narrow the list, let’s start with where the money’s going.

For domestic transfers: If you're sending money to friends or family and speed isn't crucial, use a peer-to-peer payment provider like Venmo, PayPal or Square Cash. Although transfers within a provider's network may be instant, money generally goes to a digital wallet. It then must get "cashed out" to a bank account, which can take days to process. Most have free ways to send and receive money, and they have their own security policies and measures along with being regulated as licensed money transmitters in the states where they operate.

As an alternative, your bank may provide a peer-to-peer platform, usually through a third party such as Popmoney or PayPal, but it might have fees. Or you could try using your recipient’s bank account and routing numbers to make a bank-to-bank Automated Clearing House (ACH) transfer.

If speed is the issue, a wire transfer from your bank or a provider like Western Union is your best bet.

For international transfers: These are more complicated because of the following factors:

  • Foreign exchange rate: This is what one U.S. dollar (or other currency that you send) equals to in a foreign currency like Mexican pesos. The rate that a provider uses might be marked up from what big banks use with one another.

  • Fees: This tends to be a flat amount that may change based on the transfer amount, so sending $1,000 could have a higher fee than sending $100.

  • Delivery speed: This ranges from a few minutes to over two weeks. Transfers involving bank accounts can take days, at least partly because they rely on banking business days, meaning weekdays except for holidays. Some money transfer operators let you pay with credit or debit cards, which can get delivered within minutes.

  • Network coverage: Banks rely on international banking systems, but money transfer operators rely on their own networks, which can be big or small. Web-based provider Remitly sends money from the U.S. to 10 countries, while MoneyGram and Western Union work in over 200.

Money transfer operators offer more affordable and faster transfers than banks, which have higher foreign exchange rate margins. The global average for the cost of banks' remittances, or small-amount international transfers, is 11.18% of a transfer’s sending amount, according to a recent World Bank report. In contrast, remittances from money transfer operators such as Western Union and Xoom cost 6.21% on average.

Banks are also limited to transfers between bank accounts. Some money transfer operators offer faster speeds, including transfers in minutes, and more delivery options, such as bank deposits and cash at pickup locations in the foreign country.

2. Sign up for an account on the provider’s website or mobile app

If you’ve chosen a provider that’s not your bank, you’ll need to sign up for an account. Download the provider’s mobile app from your smartphone’s app store or visit the provider’s website to sign up. Fill out the necessary details when requested, which may include your home address, bank account number and other information to identify you.

For peer-to-peer apps like Venmo or Square Cash, you can generally send money to anyone with an email address or phone number, but that recipient will need to get that app in order to receive the money. Money transfer operators aren’t bound by that limitation since transfers may go directly into your recipient’s bank account or another way, such as cash for pickup at a retail store or bank in the foreign country.

If you’re nervous about giving your information to a money transfer provider you haven’t heard of, read up on their protections and licenses on their site. In addition, there are federal protections around international money transfers regarding disclosures, error resolutions and transfer cancellation rights.

3. Provide details for payment and identification

Whatever provider you choose, you’ll need to give information about you and the person you’re sending money to. Common details for domestic transfers include:

  • Personal identification information such as your name, address and Social Security number.

  • The amount you’re sending.

  • Your bank account, credit card or debit card number.

You'll need a few more things for wires or international transfers:

  • Recipient’s full name.

  • Recipient’s bank account number.

  • Recipient’s bank details including name, address and identification code (such as the American Banking Association routing number, or if it’s international, the SWIFT code).

For more in-depth descriptions, see this guide to wiring money.

4. Confirm details and send transfer

Follow the instructions on the provider’s website or mobile app and evaluate all the transfer’s details, including cost and expected delivery. Double-check your details to avoid any mistakes and once you’re ready, press send.

5. Track your transfer’s progress

Although your part's complete, make sure the transfer arrives on time. Check for notifications from emails or your account on the provider’s website or app. If you get radio silence after the estimated delivery date, reach out to the provider and see if there’s been a problem.

Sending money online might be a matter of making a few clicks or taps on a screen, but knowing the basics will help you avoid wrong moves or extra costs.

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