If you have never spent more than a fortnight abroad then you have probably never thought about money transfer apps and why they might be useful.
If you spend a lot of your time traveling (for work or for pleasure), are an international student, or work abroad then you are probably very familiar with these apps and what they do.
If you need to transfer money while outside your home country then these apps can be a godsend. In days gone past, doing this would have taken days and the banks would have charged you a fortune to do it. You would have had to call your home bank or physically go into a bank to request this transfer.
Now, you can transfer money instantly with the push of a button and with minimal fees - just by pushing a few buttons on your phone. The app will also help you to get the best transfer rates and stay on the right side of any international money transfer laws. For example, if you need to send money from the UK to India you can access the best GBR to INR rates.
Today, we are going to look at what money transfer apps are and the benefits of using them.
A money transfer app allows payments to be made over the internet from one bank account to another. For example, your aunt could transfer money to your account.
Money transfer apps are not related to any bank, although they are monitored by the financial authorities, so they are not bound by the same international money transfer rules as banks are.
This means that the app can do the job a lot quicker and cheaper. Money transfer apps do not charge both the sender and also the payee as banks do. In the end, everyone saves money and time.
Here are a few reasons why you should use a money transfer app while you are someone you know is spending time in another country.
You can find the best banks for digital nomads here.
It is not uncommon for banks to have limits on the types of currencies that they will transfer.
If you are in a smaller country that has an uncommon currency a bank might not send you the money in that currency.
This can also change if one currency becomes too strong against the dollar and the banks start to lose money while transferring.
You don't get these types of limits with transfer apps.
When you are in another country managing your bank account can be difficult enough, an app allows you to be able to do it all from your phone.
If you are the person sending money then you don't need to go into a bank to organize the transfer with an app.
If you are in a country where you don't speak the language, there is nothing more helpful than being able to sort your money out using your phone.
Transfer apps aren't able to get away with employing hidden fees as the banks do.
When you send money overseas to a bank, both you and the person receiving the money will be charged for the service. You won't know exactly how much the whole transaction will cost you until the money has arrived in their bank account.
Money transfer apps have to tell you what they are going to charge in advance.
Unless you have a special account that is approved for use abroad, if you try to use a credit or a debit card abroad you will be fined.
These fines can be quite expensive and you will be fined for each individual transaction. As well, you may have to pay a conversion rate fee on top of this.
When you transfer money with an app, you don't just save money on fees but you also get your money at a better exchange rate most of the time.
Banks tend to take a larger cut of the money when they exchange currency for you.
Money Transfer Apps are much more closely regulated than large banks.
If you are looking for a service you can trust then use a well-trusted app. Make sure that they are insured by a large financial institution before using them.