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Methodology: How We Rate Money Transfer Providers

March 13, 2017
Banking, Money Transfer
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We analyze 11 providers that work in the U.S., including major players and smaller, innovative companies in the international money transfer industry, based on market research, experts, cost analysis and U.S. internet traffic.

They are: MoneyGram, OFX, Placid Express, Remitly, Ria, Transfast, TransferWise, Western Union, World First, WorldRemit, and Xoom (owned by PayPal).

What the ratings mean:

5 stars out of 5 — Excellent
4 stars out of 5 — Above average
3 stars out of 5 — Average
2 stars out of 5 — Below average
1 star out of 5 — Poor

Ratings are rounded to the nearest half-star.

Ratings by country and overall

A provider’s international money transfers vary from country to country in multiple ways, including cost, speed and delivery options. NerdWallet considered each provider’s money transfers from the U.S. to up to seven benchmark countries: Canada, China, Germany, India, Mexico, the Philippines and the United Kingdom.

  • Country-specific ratings: For each country, we rate a provider based on four categories: transfer costs, speed offerings, transfer methods and options, and customer experience. We take a weighted average of those category ratings to create a country-specific “total” rating.
  • Overall rating: We take into account a provider’s country-specific category ratings to arrive at a weighted overall average.

Factors we consider, depending on the category, include: fees; the foreign exchange rate the provider uses; same-day delivery options; delivery time when using a bank account; availability of sending channels, payment methods and delivery options; sending limits; the quality of user-facing tech; and customer service availability.

How We Select Benchmark Countries

Four of the countries — Mexico, China, India and the Philippines, in that order — receive the most remittances from the U.S., according to WorldBank data. Remittances are transfers sent by expatriate workers to their home countries. The other three  — Canada, Germany and the U.K. — form part of the Group of Seven, which makes up almost 50% of the global economy’s aggregate GDP. This mix of countries accounts for a broad demographic and socioeconomic range of people who send money from the U.S.

How we look at foreign exchange rates

We first collect available foreign exchange rate quotes or estimates on all providers’ websites for the various currency pairs (USD/CAD, USD/CNY, USD/EUR, USD/GBP, USD/INR, USD/MXN and USD/PHP). All data on rates are collected daily from 7 a.m. to 9 a.m. PST for four consecutive days. Calls may be made to providers to get rates not available online.

Provider rates are then compared with the daily median foreign exchange rates on the Bloomberg Markets website to determine each markup. For analysis, we take the median of each provider’s rate markups across the four days.

Transfer types

For all providers, we look at online transfers sent using bank accounts as payment and delivered to a foreign bank account.

We also consider five additional types of transfers available through eight of the 11 providers. These are online transfers sent using a debit or credit card and received as either bank deposit or cash at a foreign pickup location, as well as transfers using a bank account and received as cash pickup.

We include transfers sent using cash between U.S. and foreign agent locations for the two providers that disclose costs for this option, Western Union and MoneyGram.

Transfer amounts

Fees and rates can differ by the amount sent, so for comparison purposes, we analyze transfers of $200, $500, $1,000 and $10,000 when available for each provider.

Exceptions and Limits

For providers that don’t send personal transfers to all seven countries, we only consider the countries where they’re available. This has not negatively affected those providers’ ratings.

For MoneyGram, delivery to bank accounts in certain countries requires selecting a specific bank from a drop-down menu. In any of those cases, multiple banks are selected to confirm that costs don’t vary.

For WorldRemit, which requires that you enter a U.S. state to see rates online, we use California; we have confirmed with the company that rates don’t vary by state.

Spencer Tierney is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @SpencerNerd.