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Money Transfer Services: What You Need to Know

Richard ClaytonRichard Clayton
October 3, 2011

Today’s world is more connected than ever, providing employees with new opportunities to work with employers overseas and enter international markets.  If you’re looking for work that better suits your skill set and preferences, taking advantage of these opportunities can be exactly what you need to help you in achieving your goals.  However, at the end of the day, no job is good enough if you can’t get paid.

Being familiar with the money transfer services available on the market today, and how they apply to you, can be crucial in minimizing your costs and payment processing times.  Knowledge is power, and in this case power is money; if you’re looking for information on what money transfer services are available today and the costs involved, you’ve come to the right place.

Paper Cheques

One of the oldest money transfer services available today, the paper cheque is a very basic and inflexible method of sending and receiving money.  The process is simple; the cheque is made out to a specific party, for a specific amount.  The recipient then has the option of depositing that cheque into a bank account, or cashing it via a bank teller or cheque cashing service.  The downside is that the cheque has to be physically sent and received, and as many employees today work online and internationally, this means sending them through the postal service, creating extremely long processing times and insecurity (lost or stolen mail).  In addition, there is a very high cost for depositing and cashing cheques, and international banking regulations can often times make it difficult and even impossible to deposit an international cheque.

Summary:  High costs, long processing times and insecurity make the paper cheque an unfeasible option for sending or receiving funds in today’s market, especially in international markets.  In fact, many countries are taking action to phase out and retire the paper check from their payment systems entirely.

Cash Transfer Services

The basic idea behind this method is for the sending party to make a payment to the operator of the service in one location, and the receiving party can then pick up those funds at any location supported by the service.  This can be a comfortable payment solution for anyone not sending or receiving funds on a regular basis, as it requires no pre-registration and is very easy to use.  However, for anyone regularly sending and receiving funds, the inflexibility of the system and lack of adaptability to your needs and preferences makes it very inefficient and costly.  In addition, if the service is not available in your area, you will be unable to send or receive funds.

Summary: This is more of a general consumer option, intended for anyone who does not regularly send or receive funds.  On a regular basis, it is very costly, time consuming, and inefficient.

Bank Transfers

Main advantages of bank transfers are that they can be automated and do not require the physical transfer of cash or paper cheques.  However, not everybody has or prefers to use a bank account, and additionally many people simply prefer not to easily give out their personal banking information.  While this may be something you are OK with keeping on file with your main employer, you will likely not be confortable handing it out during one-time transactions.  In addition, differences in international banking procedures and regulations can make it very difficult, timely and costly to send and receive bank transfers.

Summary: While this may be a good option for national and trusted employers, this is not a feasible money transfer service in the international market and for one-time transactions.

Online Money Agents

These companies act as a 3rd Party between the sender and recipient.  Both parties pre-register an account with the service, and load funds using bank transfers, cash deposits or credit card loads.  Once the funds are available, you simply send them from one account to the other.  While the actual action of sending the funds within the service is quick and easy, depositing and withdrawing the funds can be somewhat of a hassle.  In essence, the entire service is composed of the money transfer services listed above, with an added step within the service.  So while it is now easier to send funds from one account to the other, you face the same obstacles in depositing and withdrawing as you do with bank transfers and cash transfer services.  Additionally, international restrictions can prohibit this service from use in many countries.

Summary: The main benefit of the service is to provide security between the two parties, however difficulties and obstacles in dealing with the service often times outweigh the benefits.

Prepaid Debit Card Services

If you are receiving payments from one or many employers on a regular basis, it is simply inefficient to repeat a complex and costly payment method every time.  Prepaid debit card services provide a solution to this problem.  Employees are provided with prepaid debit Mastercard® cards, which are pre-registered and linked with to their employee accounts.  These accounts can be accessed and managed by the employers, through use of an electronic managerial interface provided by the service.

By entering this interface, employers can easily make payments to multiple employees with the click of a button, after which the service’s automated systems load the funds to the prepaid debit card that has been provided.

This method is reusable, adaptable, global and cost effective.  Additionally, it can be integrated with a company’s payment system, allowing the employees themselves to enter the system and request a payment once they have accumulated funds, reducing the processing time for the employee and allowing you to get access to your money faster.

Summary: By providing adaptability, integration, international compatibility and security, prepaid debit card services are the most efficient and cost effective money transfer service available on the market today for anyone sending or receiving payments on a regular basis.

Getting paid is a major aspect of every job, and if you are working in international or overseas markets, it’s important that you are familiar with all of your options.  Selecting the method that works best for you will allow you to reduce the costs and processing times of receiving your payments, and overall will put more money in your pocket.

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