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Wire money, send money, transfer money, money remittance… these terms are often used interchangeably, and can be quite confusing. Is wiring money the same as transferring through a remittance website? Is it any different from going to a local convenience store and sending the money through the cashier?
Wiring is a term that describes the process of transferring funds between banks through a network, such as the Federal Reserve Wire Network or Society for Worldwide Interbank Financial Telecommunication (SWIFT). It usually means the money can only be moved between two banks, making it very difficult for someone without a bank account to be able to send or receive money. The cost for wiring money is usually pretty high, and varies depending on the amount you are sending. It is usually quick, but can take up to 2 days for the recipient’s bank to receive the funds and dispense them.
Sending money through a service like Sharemoney or Omnex is a little bit different. You can do it online or at various physical locations – grocery stores, branches, travel agencies, etc. – and you do not need to have a bank account. You provide your and your recipient’s information, and payment. The money transfer company then validates the information, aggregates your request with other customers’ and sends them all to its partners in other countries. The partners, or payors, are financial institutions responsible for paying out the money to your recipient. They can be banks, retailers, specialized remittance companies, and other convenient locations. Because these transactions are aggregated, the fees are significantly lower than those you’d pay for wiring. “Remittance” and “transfer” is just another way of referring to this type of transaction, however many still call it “wiring” (even though it’s technically different).
How does the money get there?
Sharemoney works with payors to determine one of the best ways to get your money to them. Sometimes, we predictively wire them money based on our estimates of how much money will be sent in a certain time period. Other times, payors have a credit line open for us and send us an invoice after each time period. Either way, this means the payors are never waiting around for the money to be wired to them before they can pay your recipient. Your recipient can pick up the money as soon as the transaction is approved!
Why send money instead of wiring it
- With wiring, you can only send to a bank. Your recipient may not live near a bank or have a bank account.
- Sharemoney provides more flexibility for your recipient, since we have a wide range of payout locations, and even offer home delivery in most countries.
- Bank wire fees are often significantly higher than our rates.
- You have to do a bank wire from a bank (or a bank website). This can be a challenge if you live far from a bank, don’t have a bank account, or don’t speak the language of the place you are sending from.
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