We live in a global village and that’s a fact, which means our income and expenses are no longer necessarily limited to the country we live in.

For many of us, sending money abroad or receiving payments from a client/family member in another country is relatively common.

Whether you’re an expat, a freelancer with foreign clients, an international student or own property abroad, you are probably familiar with this necessary evil. And, with excessive bank charges and extended waiting periods, evil it often is.

However, as the need for more user-friendly international money transfer has grown, so have the number of financial start-ups offering banking alternatives.

Things to keep in mind when sending money abroad

So, chances are, you stumbled upon this article because you’re about to send money abroad for the first time and have no idea where to start.

Well, you came to the right place.

While it may have sounded simple in theory, in reality there are quite a number of factors to keep in mind to do this successfully.

Here’s a list of some of the most important:

Are you transferring to another currency?

• What is the current exchange rate between these currencies?
• Do you want to send a large or small sum of money?
• How speedily do you want the person on the other side to receive the money?
• Is it a once-off payment or a recurring one?
• What fees will you have to pay?
• What will the final costs be after all the fees and exchange rate?
• How safe will your money be?

In other words, before just sending your money off with the first, most convenient option, you may want to spend some time researching which will be the most beneficial to both you and your recipient but also what the do's and don'ts are.

Why banks aren’t always the way to go

While your trusted local bank may offer uncomplicated – even helpful – service with ordinary monthly transactions, you’ll probably find that things get a bit intricate the moment you want to send money abroad.

Regardless of where you have an account, banks tend to offer poor exchange rates and are also often guilty of levying hidden charges.

Before sending money abroad, be sure to ask your bank what:

• Their transfer charge would be for your transaction.
• The recipient bank’s receiving fee is expected to be.
• Their current exchange rate is – they usually set their own, which will often be quite a bit more than the forex market rate

Once you have this information, you can establish how large a chunk of your money will essentially get lost in translation.

Alternative transfer options to check out

Fortunately, there are a growing number of financial start-ups that are offering much more affordable alternatives to high street banks for sending money abroad.

Here are three MoneyMagpie recommendations:

TransferWise

Born out of frustration, TransferWise is the brainchild of two Estonians - Taavet Hinrikus and Kristo Käärmann - who live and work in London and just got fed-up with the headache of monthly currency transfers.

The TransferWise story Taavet had worked for Skype in Estonia, so was paid in euros, but lived in London. Kristo worked in London, but had a mortgage in euros back in Estonia. They devised a simple scheme. Each month the pair checked that day’s mid-market rate on Reuters to find a fair exchange rate. Kristo put pounds into Taavet’s UK bank account, and Taavet topped up his friend’s euro account with euros. Both got the currency they needed, and neither paid a cent in hidden bank charges.

Needless to say, TransferWise was built on the same principle and has proven to be up to 8x cheaper than normal banks.

Fees They do charge a fee for their services, based on a number of factors, but will be upfront about this as soon as you initialise your transaction.

Speed While they aim to move your money as quickly as possible, the speed with which it reaches your recipient’s account depends on

• Where they are
• How you pay
• What time you do your transaction
• Security checks

TransferGo

Based in the UK and founded by four Lithuanian friends, TransferGo is a global money transfer company that supports migrant workers to send money back to their relatives without paying unnecessary bank fees.

As of 2017, TransferGo had processed over £500 million in online transfers via the web and app, achieving a run-rate of 1 million transfers per year, having been founded in 2012.

They work according to principles of local in - local out, which means customers make money transfers into a local TransferGo bank account and then the company makes a local payment to the bank account of the recipient.

Fees They charge a different fee according to how quickly you want the money to show up in your recipient’s account:

• Standard (one working day) = £0.99
• Same day = £1.99
• Express (arrives the next morning) = £2.99
• Now (arriving within 30 minutes) = £4.99

Speed As mentioned above, this can be anything between one working day and half-an-hour, depending on how urgent your transaction is and how much you’re willing to pay.