Common Mistakes in Money Transfer (and How to Avoid Them)

You have quite a few options for online money transfer. Between different providers to different payment methods and even different types of money transfer, the array of options could seem overwhelming. What’s really the best option? What should you do in order to ensure that you make the best possible transfer?

Wonder no more. Today, we want to share some of the most common mistakes people make when sending money online—and what you can do instead.

Mistake #1: Not shopping around for the best exchange rate

So you’ve decided that you want to send money abroad. You’ve checked the current exchange rate with your bank or online. So now you’re all set and ready to start sending, right?

Not necessarily. Though currency values are the same everywhere, the same isn’t true for exchange rates. Banks and other providers can set their own exchange rates, and they could add margins to the exchange rate that will favor them. It might not be apparent when you check the rates, but it could lead to some extra costs when you make your transfer.

Instead: Check the rates at multiple sources, including the Xe Currency Converter. It’ll only take a few minutes, and it will help you understand whether you’re really getting the best exchange rate. 

Mistake #2: Not paying attention to transfer timing

It’s true, sending money online will get it to its recipient faster than traditional means. However, it’s important that you consider a few things before hitting “confirm” on that money transfer, particularly if your payment comes with a deadline.

• Holidays. Is it a holiday today, or is one coming up in the next few days? What about in the country you’re sending money to? Holidays in both countries could delay your money transfer. It’s also likely that your money transfer will have to run through a bank or financial institution in its journey, meaning that bank holidays could also add some extra travel time.

• Payment method. When you pay for your money transfer, be aware that not all payment methods are the same. While an ACH payment will save you on the bank service fees, these payments generally take much longer to process than card or bank payments. Here’s a little more information on how your payment method can affect your transfer time.

• Expected transfer date. Before you confirm your transfer, you’ll be informed of when your money transfer is likely to be sent. Don’t ignore that detail!

Instead: Check the calendar, check the transfer date, and choose the payment method that suits your situation.

Mistake #3: Not exploring all your options

Just because you want to make a money transfer doesn’t mean your only option is to send it right this minute, at the current rate of exchange. There are several other options available to you, especially if your money transfer isn’t time-sensitive.

• Forward contracts lock in the current rate for a future transfer at a later date, so you won’t need to worry about the exchange rate when you do choose to transfer.

• Market orders allow you to identify an ideal “target rate”, and then automatically send your transfer when the rate is reached.

Instead: Look into the different types of money transfers, how they work, and how they can help you. You might find that one transfer type is just what you need.

Mistake #4: Falling victim to common scams

Unfortunately, online money transfer is not free from scammers and fraudsters. As with anything that handles money and personal information, you could encounter those looking to exploit it.

Before sending money, ask yourself the following questions:

• Do I know the person I’m sending money to?

• Have I confirmed that they need the money?

• Is there anything odd or suspicious about the situation?

• Am I using a secure, established provider to handle my transfer?

Instead: Read our blog post on identifying and avoiding money transfer scams, and always be discerning. It’s better to double-check now than deal with fraud later.

Mistake #5: Sticking with the bank

We all use banks for a variety of financial needs. However, money transfer isn’t one of the times you should turn to your friendly local bank.

Why is that?

• Unfavorable rates and fees. Remember what we said about some providers setting their own exchange rates, rates that will be more favorable to them than you? Banks are an example of this. When you add on bank service fees, the costs of transferring with your bank could quickly add up.

• Slower travel times. Between limited working hours and frequent bank holidays, it’s likely that your money transfers will take longer to arrive.

Instead: Try sending a money transfer with Xe. You can initiate one 24/7, 365 days a year, and we promise that you’ll get the real rate of exchange.

We hope this makes you feel more secure about your money transfer plans. Ready to transfer? Sign in to your account to get started, or visit our Money Transfer page to learn more about our options.