The topic had to come up at some point, why not today? We’ve all had to figure out international money transfers at one point in time since living in Germany, and if not yet, just you wait.
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My time came when we decided to buy a house in Germany. That meant that all of my savings from when I was younger would need to be pulled from Canada and sent to Germany. So, I started Googling and researching various websites comparing various options. Here are the options I came up with:
#1 – Go Directly Through the Bank
In this case, I would need to go to my Canadian bank and issue a bank wire to my German bank. The fees are charged at each end for international transfers (Canada’s being about $30, and Germany’s fees being so high that even my bank advisor at Deutsche Bank advised me to go an alternative route). You are also dinged on exchange rates as the banks usually don’t offer up the best rates on the market.
It’s clear in this blog post that I’m not promoting you go directly through the bank, with the exception that you are:
- Sending the same currency, or
- Sending a money transfer within the European Union
If one of the two applies to you, the transfers are typically a lot more affordable (if not free), quick and easy to do. If you’re sending money overseas, my advice would be to avoid money transfers with the bank completely.
#2 – Ole’ Faithful Money Transfer Services (Western Union)
Western Union often sounds like a great solution simply because the brand is engrained into our brains. Since I was a little girl, I always knew the Western Union logo and I knew that when you needed to get money sent somewhere fast, Western Union was the service to use.
Western Union does still stay true to their fast service. If you are in immediate need of funds (or someone else needs your support quickly), then Western Union is a great option, but you will pay the price for it. If your transfer isn’t as urgent, stay away from sending via Western Union and save yourself the money by finding an alternative method.
#3 – Use PayPal
Many of us have used PayPal enough times to know that it’s easy to use and our money is safe in the process. I get paid from some of my international clients via PayPal and have nothing but wonderful things to say about this platform.
However, I have never made an international transfer via PayPal. So, I did some research and found out that PayPal is a great option to send money between friends and family members for free (but only if you are within Europe and sending money in the same currency). If you are sending money internationally, you’ll be paying international fees (2% or more per transaction) plus a fixed PayPal fee and 2.9% – 7.4% fees if you’re transferring from a credit card. In the end, the fees alone (not even taking into account the exchange rate) were far too high for me.
#4 – New Online Transfer Services like TransferWise, XE and torfx
And then finally, the new and improved way to send and receive money quickly, safely and conveniently. Why didn’t I tell you this sooner? Well, you need to know what you’re comparing them to before you decide to believe me.
They’re all free of hidden costs, they all offer the real exchange rates (awesome) and there are no fees to change currencies.
The way they work is:
- You send the money to transfer service company in your original currency, avoiding exchange rate fees from the bank
- The company will give you the exchange rate you agreed upon and you’ll be able to see it in dollar value without even setting up an account
- Then, the company will release the money to the bank of your choice in the currency you requested
- Happy camper, the end.
I paid a $30 fee from my Canadian bank for an international bank wire, but the rest of the process was smooth sailing. No hidden fees, no fees upon arrival in my Deutsche Bank (because it was sent in Euros) and within 3 days I had all the money in my German account.
So, did I choose TransferWise, XE or torfx? And why?
After hours of comparing TransferWise and torfx, I ended up choosing torfx (XE is also an exceptional transfer platform, but I was only recommended it after I exchanged my Canadian dollars). Although torfx is a much smaller platform compared to XE and TransferWise, there were a couple very valid reasons for my decision.
- While TransferWise is upfront and honest about their fee, they do charge a 0.5% fee of the amount sent, torfx has absolutely NO fees.
- Because torfx is a smaller platform, their customer service is phenomenal. Within minutes of registering, you will be set up with your own account rep who has no problem emailing you or giving you a call (even internationally – I had my rep call me from Canada and Germany) to clarify any questions you have or even walking you through the transfer process. I noticed that their exchange rate was a few pennies higher than TransferWise (likely because TransferWise charges a fee on top that can account for lost money) and my rep had no problem matching the exchange rate for me). I also accidentally made a request to send money before actually realizing I needed to be present at my bank in Canada to make the transfer from my own personal bank (simply the rules of my bank) and my rep was kind enough to remove the request until I had everything set up and ready.
Note: if you make a request to send money, that means you’re also sending a flag to the transfer service to buy the end currency – in my case Euros – so if I cancel my request too late, then the transfer service could end up purchasing those Euros that have not yet been paid for by me. You can be charged heavily if you aren’t careful. Luckily, because the torfx customer service was so great, my rep kindly removed my request ASAP to avoid me paying high fees and allowed me to continue when I was ready.
So, after a good couple weeks of hardcore research, I’m happy to say that I made the right decision to internationally transfer my money with torfx. The experience was simple, straightforward and dare I actually say… enjoyable.
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