Sending money to loved ones overseas shouldn’t be painful
January 4th, 2019
Many people living in Canada send money to their friends and family living overseas. Statistics Canada estimated that 1.6 million households sent at least $500 to relatives and friends living out of the country in 2016 alone. The World Bank recently estimated that in 2016 Canadians made a staggering $24 billion dollars in financial remittances, or money transfers, with China, India, and the Philippines being the top recipients.
With 1 in 5 Canadians born outside of the country, and almost 3 million Canadians living abroad, there are many reasons why people send money overseas. Supporting family members is one of these reasons, as is buying foreign property, paying for a child’s tuition, or even making foreign investments.
Remittances are typically made at either money transfer outlets, such as Western Union, or at one of the major banks, and fees are typically high. Most organizations charge a service fee, plus a percentage of the total transaction amount, plus a spread on the exchange rate. According to the World Bank, the average cost for an international money transfer out of Canada is 9% of the amount being transferred.
TransferWise – A new way to send money overseas
TransferWise works seamlessly with the EQ Bank Savings Plus Account. You can add TransferWise as a biller on the EQ Bank Savings Plus Account and send funds quickly to your TransferWise account.
TransferWise was founded in 2010 with “the vision of making international money transfers cheap, fair, and simple.” Their model is easy: it bypasses the international payments process by making two local transfers instead of making one international transfer. For example, if you want to send funds from Canada to India, you send your funds in Canadian dollars to TransferWise’s Canada-based account. The equivalent amount is sent to the recipient from TransferWise’s Indian-based account in the local currency. Currency is exchanged at the real exchange rate.
TransferWise is upfront about their fees - they do have a small service charge, plus the cost of transferring funds into their local account, however, there is no spread on currency exchange rates.
Benefits over traditional outlets and banks
There are several benefits to using TransferWise when compared to traditional options:
|TransferWise||Traditional Money Transfer Options|
|Fees||Small fee based on transaction size, plus the cost of transferring funds. Fees generally depend on how much money is being transferred, as well as the destination country. It typically costs 0.5% plus $0.75 to send $100 USD to a recipient in the US, and there is no foreign exchange spread.*||Service fee, percent of the total transaction amount, spread on exchange rate. Fees generally depend on how much money is being transferred, as well as the destination country. It typically costs anywhere from 5% to 10% to send $100 USD to a recipient in the US, not including the foreign exchange spread.*|
|Timing||90% of transfers are completed within 24 hours.||Transfers are typically completed within 3 – 7 days.|
|Access||Can complete all transactions online.||Some online access, but many transfer outlets do not have online capabilities so transfers are most often done in person.|
|Ease & Convenience||Can easily add TransferWise as a biller on the EQ Bank Savings Plus Account, and seamlessly send money to your TransferWise account.||Can connect personal accounts from other banking institutions to the EQ Bank Savings Plus Account, but unable to do so with money transfer outlets.|
Sending money to friends and family overseas does not need to be so cost prohibitive. TransferWise can help you save money on this service, while making sure that money arrives quickly and safely. The recipient is not charged a fee for receiving the funds, which means you can get the full amount of money into the pockets of your loved ones, without reaching deeper than you need to into your own pocket. Add TransferWise as a bill payee to your EQ Bank Savings Plus Account and try it today.
*Estimate of the costs associated with foreign currency exchange at the time of writing. It represents fees expressed as a percent of the transaction amount, plus one-time fees (if any) charged by various institutions for sending $100USD from Canada to a recipient in the United States.