6 Inexpensive Ways to Send Money Overseas

Once upon a time, and not too long ago, if you wanted to send money overseas, pretty much the only way to do it was to walk into a bank and request an international money transfer (IMT). Simple and easy, right?

While ordering an IMT may indeed be relatively easy and you like to stick to what you're used to, the cost of doing business with a bank in this way almost certainly still stings in the hip pocket.

How do the banks get away with it?  The answer is simple: because you let them.

You're already a customer, you know the process, you basically trust them - and so you pay through the nose in the form of dodgy exchange rates and whopping great fees.

But we now know that going to a big institution like the Commonwealth Bank to get your money overseas is no longer the automatically sensible choice. CBA exchange rates are outpaced by many competitors, but there may also be a range of more flexible and convenient options that charge you lower fees as well.

Ready to look into how to get a little more savvy?  Are there really cheaper and better ways to get money from one country to another?

6 Inexpensive Ways to Send Money Overseas

1. Cheque

Not exactly any more '21st century' than a money transfer, simply writing a paper cheque and slapping on a stamp may however be more affordable.

But while that might be true for cheques exchanged between local banks, it's a little more complicated when it comes to sending one overseas.  There could be a long delay and the receiving bank may not even accept it.  But if there are fees and a bad exchange rate, it will likely be the recipient who cops it.

2. Money order

The more appropriate version of a 'cheque' for sending money overseas is a money order.

In 2018, the modern money order comes in a few forms. Whether you get one at a bank or post office or online, you specify the recipient just like with a cheque, but the money is pre-paid and therefore guaranteed.  Unlike mailing a cheque, a money order is also traceable, although it is likely to still take many days for the recipient to get hold of their cash.  Another downside is that the amount you can send could be limited, and chunky fees still apply.

3. Online

For many years now, people have been preferring to send money not in the traditional ways but by using that great 21st century innovation - the internet.

Online payments are convenient, and not just because you don't have to worry about complex and easy-to-fudge combinations of local bank account numbers and head-scratching things like SWIFT codes.  The fees are also generally lower because you're not paying for staff at one of many expensive bank branches.

There are now a growing number of ways to just sign up for an online money service and then make your payments from a smart phone or computer, and it only takes a matter of minutes.

However, you may not get the best exchange rates, so look into that as well as extra fees and whether it's you or the recipient who pays the bulk of them.

4. Peer-to-peer

Perhaps the very latest trend in low cost money transferring is known as 'peer-to-peer'.

Basically, it involves cutting out the middle man - let's say the bank - and instead joining a network of people, making it a simpler and more affordable process.

Normally, the peer-to-peer (P2P) service you choose receives your money, exchanges it at the mid-market rate, and finds you a 'peer' who is doing the opposite transaction. For instance, if you want to get money from Australia to the US, the P2P service matches you with someone in America trying to send to Australia and keeps the actual money locally.  The pay-off is lower fees and a better exchange rate.

5. Money exchange specialist

If peer-to-peer isn't your cup of tea, there is another way to send money the 'traditional' way that may be considerably cheaper than a bank.

We're talking about specialist currency exchange providers, who - unlike banks - concentrate on sending money as their core business.  The fact that they specialise means that the exchange rates will normally be better and the fees will be lower.

Another advantage over the banks is that, because you're dealing with an actual foreign exchange specialist, the service is more finely tuned for the customer with greater flexibility and options - although you may still need to take the step of setting up an account.

6. Outside the box

No matter what you think of them, the methods described above are basically 'mainstream' ways to get money overseas these days.  So here's the trendy alternative: Bitcoin.

Although just one of the many 'Crytocurrencies', Bitcoin is attracting a huge amount of attention at the moment as the price skyrockets up and down.  But it can actually be used to send and receive money - if you're savvy and brave enough to get your head around how a digital currency really works.

It will also involve setting up a special wallet using a Bitcoin payments handler, use your money to fund that account and then get the recipient to do the same in order to receive your money.  The upside is that the transaction is cheap, but the downside is that as soon as your money hits Bitcoin, it may start losing value.

Sending money overseas?  The choice is yours

As you can see, the options start to add up once you look a little beyond that familiar option of sending and receiving money using a traditional bank transfer. At the very least, they're all worth looking into - because it's your money, and doesn't grow on trees.