There used to be very limited options for sending or transferring money. You could write a check, hand over cash, or wire money. Today, as commerce becomes increasingly digitized, there are more options than ever.
Consider These 4 Options
Sending money by cash or check now seems prehistoric. Even bank drafts and money orders feel archaic. We’re living in a world of instant, digital money transfers and incredible diversity of options. And as awesome as it is to have options, sometimes the sheer number of choices feels overwhelming.
Transferring money is not a one-size-fits-all decision. The way in which you send money depends on the situation, what you’re paying for, who is receiving it, how much money is being sent, and a myriad of other factors.
Keeping this in mind, here are several options for different scenarios:
1. Sending Money to Family and Friends
Sending money to family and friends? You have plenty of options to choose from. The question is, which one is the cheapest, fastest, and most secure?
For many years, PayPal has been the go-to option. However, there are additional options on the market – many of which are easier, faster, and have better user interfaces.
Zelle has quickly become one of the preferred options (largely because of the way it’s partnered with big banks for seamless integration). There are no fees for sending money to family or friends with Zelle, though there is a $500 weekly transaction limit. Another big benefit is that just one party needs a Zelle account. This means you can use Zelle to send money even if your friend or loved one doesn’t have an account.
Venmo is another option, though you’ll run into three percent fees when using a credit card. Like Zelle, the transfer is instant. The transaction limit is also higher, with a $4,999.99 person-to-person transaction limit after identity confirmation. Unlike Zelle, both users need a Venmo account.
Cash App is another choice. It operates very similarly to Venmo, but with a larger transaction limit ($7,500 over any seven-day period).
2. Paying a Vendor
For businesses paying vendors for services, many of the traditional options still work well. For small payments under $1,000, a business credit card or mainstream option like ACH/EFT transfer or PayPal is a good choice. (If using PayPal, you’ll need to confirm with your vendor whether they’ll accept it or not. The recipient has to pay a 2.9 percent fee on all funds received.) You can also use these same traditional methods on larger payments if dealing with an industrialized country like Australia, Japan, Singapore, or the U.K.
3. Paying an Overseas Supplier
Dealing with overseas suppliers and need to make a large transaction? You’ll have a hard time sending money using traditional means. And if you aren’t careful, a typical bank wire can cost you thousands of dollars in fees. Thankfully, there are better international wire transfer options, like Airwallex.
Airwallex is arguably the easiest way to send money internationally to suppliers and other businesses. You can transfer money in 30-plus currencies and pay lower rates than almost any other platform. Plus, there are no signup fees and zero ongoing accounting fees.
4. Depositing Money Into an Escrow Accounting
When making an offer on a property or piece of real estate, you’ll usually need to put up some earnest money in the form of a deposit. This shows the seller that you’re serious and gives them some recourse should you back out without justification.
Typically, most attorneys and real estate companies still want escrow money to be sent using traditional options like a personal check, wire transfer, or certified check. However, it’ll be interesting to see if there are changes to escrow “best practices” in the future.
Adding it All Up
The different choices may seem overwhelming at times, but it’s imperative that you dig into the facts and attempt to understand the pros and cons of each option in different situations and scenarios.
“Shopping around and investigating your options will help you find the best deal for money transfers. Take your time and look for the latest fee information online,” Investopedia suggests. “The cheapest method for transferring money in one circumstance might not be the same in another. Do your homework to make sure that you’re not giving away your hard-earned money to big financial institutions or money transfer organizations.”
Before you send money to anyone, make sure you understand your options and explore all possible methods. Consider factors like fees and expenses, speed of delivery, security, reliability, and ease of access. Each of these elements is important and should be taken seriously.