What is included in the cost of a money transfer?

The cost of a money transfer

When you are sending money from point A to point B, there might be associated costs, or it can be free. To transfer funds using money transfer services is the most convenient way to make a payment transaction. However, if we must check on the costs of each single and recurring payments, it would be an accountancy challenge.

Awareness

But, we may be able to cut down the costs for money transfers. The first step to take is to have an overall awareness of what rides on top of the movement of the funds. If the transfer is not free, like when using one of the best money services company’s person-to-person app, there are upfront fees and those that you need to see.

Dependent on the kind of service

The cost of transferring money depends on the kind of service that you will use. There are outright fees for some local and international bank-to-bank transfers. For online payments such as those for utility bills, there is a minimal amount that might be applied for using the electronic payment option. If one uses their debit or credit card, there typically is an annual fee.

Cutting down the time

When there is a bank transfer, additional charges might be made for the actual transaction. There will be an additional fee if you request to cut down the period from the usual 3 to 5 days for the funds to be moved. All these fees add up, and the cost would increase when sending larger amounts.

Flat rates

For certain money transfer services, a flat rate would be collected for each transaction. This flat rate can change per money transfer service, as the sending fee could be dependent on the amount. A rate table for the fees would be applied, gradually increasing as the amount to be sent get larger.  

No fees

When you use an online payment service, there are advantages as there could be no fees at all for money transfers. Yet, that free money transfer depends on the company. There are those companies that will charge a fee per transaction, but these are typically much lower than that of banking institutions.

Recipient costs

There are times that the recipient has to pay a certain amount to be able to get the funds. This cost might be an amount during their cash out at a money transfer agency. This type of fee does occur, but it is not common practice.

Exchange rates

The amount of money sent will change when making payments to other currencies. If the funds are in dollars, it would have to be exchanged to the destination’s currency. Note that for most exchanges, the conversion to a certain currency would not provide the same amount as the original funds sent if converted again.

Cutting down the costs

When you count the costs of transferring money, there will always be a certain amount for availing of the payment services. In the long run, the cost of creating an account with a money services provider that has the free sending option will pay for itself over time. The amount of savings per transaction using their app to send money for free drastically cuts down costs.