Sending money to another country is more common than many people realize. Whether you’re supporting family back home, paying for something overseas, or managing finances while living abroad, these international money transfers called remittances play a big role in the global economy.
In fact, people around the world send hundreds of billions of dollars across borders every year. For individuals, though, the most important thing isn’t the global numbersit’s understanding how to send money safely, quickly, and without overpaying in fees.
Let’s walk through the basics in plain English.
What Is a Remittance?
A remittance is simply money sent from one country to another. Most often, it’s a personal transfer for example, someone working in the United States sending money to parents or children in another country.
People send remittances for many reasons, such as:
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Helping family cover living expenses
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Paying school tuition or medical bills
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Repaying loans
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Accessing local currency while traveling
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Buying goods or services abroad
Because these transfers often support essential needs, choosing the right method really matters.
Why Fees Matter More Than You Think
International money transfers aren’t free. On average, sending money overseas can cost around 6% to 7% of the amount sent, and sometimes more.
That may not sound like much, but it adds up fast.
For example:
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If you send $300 and pay 7% in fees, that’s $21 gone
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Over a year of monthly transfers, that’s more than $250 lost to fees
For people who send money regularly, learning how fees work can save real money.
Common Ways to Send Money Internationally
1. Banks and Credit Unions
Traditional banks can handle international transfers, especially if you don’t send money often.
Banks may offer:
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International wire transfers
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Transfers to partner banks abroad
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Limited ACH-style international payments
The downside? Bank transfers can be slow and expensive, especially for smaller amounts. Still, they can be a good option if safety is your top priority and speed isn’t critical.
2. Money Transfer Services
Dedicated money transfer companies are popular because they’re designed for frequent international payments.
You can send money:
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Online through a website or app
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In person at agent locations (often inside grocery or convenience stores)
To send money, you usually:
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Create an account
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Enter the recipient’s details
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Choose how to fund the transfer
Funding options often include:
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Bank accounts
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Debit cards
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Credit cards
Credit cards are usually the most expensive option, since they often count as cash advances and start charging interest immediately.
Well-known companies like Western Union are easy to use and widely available, but that convenience often comes with higher costs.
3. New Digital and App-Based Services
Newer companies including mobile apps and blockchain-based services have entered the remittance market in recent years. Some offer faster transfers and lower fees.
Before using a new or unfamiliar service:
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Read customer reviews
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Check if the company is regulated
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Look for clear fee disclosures
If you want the strongest consumer protection, stick with:
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Your bank or credit union
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A large, established transfer company
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A federally regulated remittance provider
4. Checks and Money Orders
Paper payments are still possible, but they’re usually slow and risky.
They often require:
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A bank account on the receiving end
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Long processing times
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Trust that the payment won’t get lost
Sending large amounts this way isn’t recommended, especially in places where banking access is limited.
5. Prepaid Debit Cards
Prepaid cards can work in certain situations. You load money onto the card, and the recipient uses it like a debit card.
However:
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Fees can be high
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Getting the card to another country can be difficult
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Cards aren’t accepted everywhere, especially in cash-based economies
For many people, this option is more trouble than it’s worth.
Understanding Remittance Fees (The Hidden Costs)
You usually pay for international transfers in two main ways:
1. Service Fees
These are upfront charges either flat fees or a percentage of the amount sent.
2. Exchange Rate Markups
This is the sneaky one. Instead of charging a visible fee, the provider gives you a worse exchange rate and keeps the difference.
Example:
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Official rate: $1 = 50 pesos
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Provider rate: $1 = 49 pesos
Send $100:
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At the official rate: 5,000 pesos
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With the markup: 4,900 pesos
That’s a hidden cost of 100 pesos.
Which Fee Structure Is Better?
It depends on how much you’re sending.
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Small amounts: A low flat fee may be better, even if the exchange rate isn’t perfect
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Large amounts: A better exchange rate matters more, even if the service fee is higher
Always look at how much the recipient will actually receive, not just the fee you pay.
Fees the Recipient Might Pay
Even if you pay all fees upfront, the person receiving the money might still face:
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Bank processing fees
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ATM withdrawal fees
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Local taxes or government charges
Your transfer provider may not know all of these costs, but they should share any information they have.
What If Something Goes Wrong?
If you use a federally regulated remittance provider in the U.S, you’re protected by consumer rules that require:
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Clear fee disclosures
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Error investigations
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Refunds in certain situations
You generally have:
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180 days to report a problem
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90 days for the provider to investigate
Other services may still help resolve issues, but they aren’t held to the same standards. You may also have protections under state law or through your bank or card issuer.
Final Thoughts
Sending money abroad doesn’t have to be confusing or expensive. By understanding your options, watching out for hidden fees, and choosing trusted providers, you can make sure more of your money reaches the people who need it.
If you send remittances regularly, a little knowledge can go a long way and put real dollars back in your pocket.
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