Send money abroad : comparison between Western Union and Transferwise
The big majority of expats relies on Western Union to send money abroad. Understandable. It’s the oldest existing company when it comes about money transfer, a real trustworthiness titan. But, as a consequence, also one of the most expensive. When it comes about your precious savings, it’s absolutely understandable that you want to be sure your money doesn’t get lost in the ether and get to destination safely. I feel you. It’s the same reasoning I used to do as well. But… I’m a little Scrooge (way more charming though ;)) so I couldn’t help but doing some research in order to save some extra money. Since I have to send money to Italy on a monthly basis, I had to find better info to avoid useless waste of money. Bank transfers were out of discussion because the commissions are super high. It’d make sense only if I had to send huge amounts (let’s say over 5000 dollars) and only once, or very occasionally.
Since I don’t like to donate to scammers, first thing first, I excluded several companies with a shady reputation. Relying on reviews, services, costs and guarantees, the choice came down to two options: Western Union (that I was already using) and Transferwise.
Before diving into the details e compare these two companies, I’d like to specify that I’m not a financial expert or advisor. Here you won’t read big and difficult words of worldwide economy. Instead, I’m the first who doesn’t understand a bat about this topic. But I can compare two different fees and I can tell you why, eventually, I chose one above the other (eeeh, you must read until the end to see who wins! Don’t cheat!)
N.B: This post contains a referral link, if you use it you’ll get a discount and I earn a small commission.
Send money online: which one?
First, let’s see on which personal needs I based my choice on, as your could be very different:
- Send money from the US to Italy;
- Send money on a monthly basis;
- Less than 1000 dollars a month;
- Send money from my bank account or debit card to another bank account;
- I needed it to be as quickly as possible.
In other words, I’m still paying a loan in Italy. But these factors could represent other reasons why you might need to send money (o receive it) abroad. For instance, if your parents decide to help you with the expenses after you moved abroad or to send a monthly savings for your son.
Let’s get started
Let the match begin and we’ll see who wins in the end, considering the following factors:
Western Union has always been there. You can be sure that it’s a serious company and its app is fairly easy to use. Personally, I’ve been relying on them for 2 years and I NEVER had one problem. Not one!
On the other side, Transferwise is way younger (born in 2011), but in these 7 years, they collected excellent reviews from all over the world. A brief research on Google will show you that they’re not newbies at all. They also have a functional and simple app.
I’ll be skeptic here and assign one point the good old Western Union, since I’m also already a customer. You know what you leave, but never know what you’ll find (Italian saying). So 1-0 for Western.
I have to assign another point to Western here. Although Transferwise has a strong presence online, unfortunately that’s it, while WU has physical agencies all over the world. This give customers the chance to send or receive cash, for instance, instead of just an online transfer.
Besides, WU also has a loyalty plan fairly smart to reward its customers such as myself (discounts on fees or other type of rewards)
So 2-0 for our friend Western Union. But wait, because the match isn’t over quiet yet!!
I’m one of those people who don’t love to waste their time for these kind of chores on the computer. They make me really frustrated and, for how much I try to figure everything out by myself, I often end up calling one of my brothers to help me. So it’s essential for me that the process is as simple as possible.
WU is not bad at all, but Transferwise guys… Another story. Both the app and the website offer way less steps. With TW in 3 steps you alredy chose the options you prefer and your money is already on the way with an incredible transparency.
Transferwise scores its first point, but we’re still 2-1 for WU
4. Costs. Now comes the fun
For my USA-Italy situation and for the amount, TW is absolutely the best option. At first sight it might seem like WU offers the lowest commission, since it’s a fixed rate. Depending on which payment method you choose to send or receive money, the fees change. But in my case (from bank account to bank account), the commission to send less than 1,000 dollars it’s only $5.
TW instead, works on percentage, so the fees for that amount is about $8. Although, I get more money in my bank account with TW. Why? Because the exchange fee is absolutely more realistic, updated and most importantly, it’s granted. So for amounts under $1,000 it’s definitely more convenient.
I mentioned before I’m not an expert in technical terms, so let me give you a practical example (based on today’s exchange fees) that will clarify:
If you send $1000 with Western Union, the receiver would get 748.02 euros, plus $5 dollars in commissions
With TW instead, the receiver would get 802.71 euro and the commission is included
So with WU = tot expense $1,005 – receiver gets 748 euro
With TW = tot expense $1,000 – receiver gets 802 euro
With a net saving of 59 dollars!!!
If you multiply this saving for 12 months…. DEFINITELY A POINT FOR TRANSFERWISE!! (Even for a single transfer I’d say it counts, right?).
And since I’m a direct descendant of Mr. Scrooge, this would suffice to assign the victory to TW. But we’re only 2-2, so we need an extra time. And speaking of time…
For WU timing change depending on which kind of service you use. For example, the option to withdraw cash in one of their agencies is almost immediate. We’re talking about minutes, but it’s also more expensive. Not to mention that someone will have to be physically there to withdraw the money. All the cheaper options to send money (such as the one I mentioned before for $5), can take up to 5 days.
Being completely online, with TW the process is standard, whether you pay with debit/credit cart or from your bank account, and it takes… drum roll…. ONLY 1 DAY!! To me the speed factor is important because I get my paycheck always very close to my loan deadline so I need to be sure that the money gets there on time to avoid penalties.
After these simple but practical considerations….
… And the winner is…. TRANSFERWISE!
That’s right! I gave them one single chance to newbie to gain my trust and they didn’t fail. Since then I’ve always used Transferwise and never regretted it, not to mention that I’ve been saving an average of $50 dollars per months. It’s about 600 dollars a year!! I mean… right?
If you can relate to this in terms of needs, I strongly suggest to choose this company. It won’t fail you and it’ll make you save some money that you can use for whatever you need, or maybe a good vacation.
Using this link you’ll get ZERO FEES on your first international transfer!! It’s definitely what I call a win-win situation! This way you’ll have the chance to give it a try without paying any commission when you send money for the first time, and see how it works for you! 😉 Don’t tell me I don’t spoil my Mamas!
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