International Money Transfers

International Money Transfers: Sending & Receiving Money Abroad

What is an International Money Transfer?

An international money transfer is a method of moving money from one country to another country. As an expat in any country, you will probably have to deal with international money transfers. There are a lot of ways to transfer money, so it’s important to understand the best option for your situation. For all international money transfers, you need to consider factors such as the fees, the exchange rate, speed and convenience.

It can be confusing – you’re not alone! I went through the process of moving to a new country, and there was a lot to figure out. Finding the cheapest, safest, and fastest way to transfer money internationally to my new bank account was definitely a learning experience. I’m going to share what I learned to help you find the best option for your international money transfers.

Options for international money transfers:

There are three ways to transfer money between different countries and currencies:

  1. Remittance Services 
  2. Foreign Exchange (forex) Transfer Services 
  3. Bank Wire Transfer

Some options are better than others. From my experience, using a foreign exchange transfer service was the best option and a bank wire transfer was the worst option. You can take a brief look at a table below to see a comparison between the three options. I’ll explain each service in detail, however, so that you can take a closer look and choose the best option for your situation.

2,000 USD to Euros

* As of July 10, 2019


Remittance Service

(Western Union)

Foreign Exchange Transfer Service



(Bank of America)

Sending Fee




Markup on the Exchange Rate

Markup on the mid-market rate

Real mid-market rate

Markup on the mid-market rate

Receiving Fee





What is a remittance service?

A remittance service is one of your options for transferring money abroad. Remittance services, such as Western Union and MoneyGram, are good to use when the recipient does not have a bank account. For example, if you send money through Western Union, the recipient can pick up the money in cash at any Western Union location. The same concept applies to MoneyGram.

You can use remittance services to send money via cash or your bank account. Oftentimes, you can also use your credit or debit card to send money internationally through remittance services. This usually makes the transfer process faster. On the other hand, it will increase the cost of the transfer.

Remittance services usually cost more than foreign exchange transfer services because they charge a flat rate for the transaction, in addition to a markup on the exchange rate.

What is a foreign exchange (forex) transfer service?

If both the sender and the receiver have bank accounts*, a forex transfer service is the best option for international money transfers. Forex services, such as TransferWise, allow you to transfer money from one country to another country, including those with different currencies. If the money is transferred between different currencies, they use an exchange rate to covert the currency. For example, if you need to transfer money from your UK bank account to your German bank account, the forex service would convert the amount in Pounds (£) to Euros (€).

Unlike banks and many remittance services, forex transfer services normally do not mark the exchange rate up to make money. They do, however, usually charge a fee. More often than not, if the amount you are transferring is small, it is a flat fee. If you are transferring a larger amount, the fee is a percentage of the amount of money you are transferring.

Since forex services, like TransferWise, charge a small fee but do not mark the exchange rate up, you know exactly what you’re paying for.

* A really great bank that caters to expats is N26. It’s all in English and has no foreign transaction fees. N26 is also the bank we use. Click here to learn more about N26 and banking in Germany for expats.
* If you’re only interested in having a bank account to receive payments from TransferWise, you can also open a TransferWise Borderless account. You can have money deposited from payments received via TransferWise in this account.

What is a bank wire transfer?

Bank wire transfers are usually the most expensive option of the three ways to transfer money abroad. This is because banks have a very high markup on their exchange rates. Most banks have a flat fee for international money transfers, which may seem appealing for large transfers. However, even if banks market themselves as having low fees for international money transfers, they will usually cost you more because of their high exchange rate. So, pay attention to the exchange rate the bank offers you. By changing the exchange rate, banks can hide the true amount they are charging you.

Another reason international bank wire transfers are the most expensive option is because at least three parties are involved in completing the international money transfer: (1) the bank of your home country, (2) the foreign bank, and (3) a wiring process system between the banks. Sometimes there are also intermediary banks that help with the transfer between the bank of your home country and the foreign bank.

All of these parties charge a fee. Your bank will charge a sending fee. The average sending fee is 40€. The bank in your new country will charge a receiving fee. The average receiving fee is 12€. Any intermediary banks will also charge a fee. And lastly, as mention before, when a bank wires the funds to your new bank, they will mark the exchange rate up and keep the difference.

What’s the mid-market rate?

Mid-market rate: This is the fairest exchange rate you can get for international money transfers. Sometimes it is called interbank rate. The rate is calculated using average between the price at which buyers are willing to spend on a currency and the price at which sellers are willing to sell the currency. It’s supply and demand, and it changes constantly. Banks will charge you an exchange rate that is higher than the real mid-market exchange rate. The true mid-market rate, however, is not a secret. You can find the true exchange rate on Google. For example, you can type into the Google search bar, “Current exchange rate between the US dollar and the Euro.” Google results will tell you how many US dollars you can get for 1 Euro as of that time. One reason we use TransferWise is because it always uses the mid-market rate.

So… what’s the best way to transfer money internationally?

The best way to transfer your money from your home country is through TransferWise. It’s the service everyone at Germany2Go uses, and it’s the service we recommend.  

Why is TransferWise your best option?

  1. TransferWise uses the mid-market exchange rate, which is the true and fair exchange rate. Banks and remittance services make money off you by charging you more for the exchange rate and keeping the difference. Western Union even says in their Legal Disclaimer that they make money from the currency exchange rate they offer you. 
  2. TransferWise supports over 750 different currency exchanges, including USD, EUR, AUD, GBP, and CHF.
  3. You can use the calculator on the TransferWise homepage to calculate how much it will cost to send money to a country with a different currency. Unlike banks and remittance services, you don’t need an account to see the fees and exchange rate. 
  4. You can create a TransferWise account for free. 
  5. The recipient does not need to have a TransferWise account to receive your transfer. All they need is a bank account. 
  6. You can pay with your credit card, debit card, or your local bank account. Your bank account does not need to be connected to TransferWise (except if you are sending money from the US or Canada). 
  7. TransferWise will send your recipient an email to let them know that the transfer is being sent to his/her bank account. 
  8. The transfer goes right into the bank account of the recipient. No extra work is needed on the other end of the transfer. 
  9. There is no receiving fee, unlike transfers made with banks.

3 tips for choosing a money transfer service: 

  1. Be cautious of any service claiming to have a ‘0% fee’ or ‘zero commission’. It’s never free to do an international money transfer. Any service making these claims is charging you a higher exchange rate than the true mid-market rate. 
  2. Search on Google the mid-market rate for the currencies you plan to transfer money between. That’s the true mid-market rate. You should choose a service that offers this mid-market rate.
  3.  The fees and the exchange rate determine how much a transfer will cost. Compare how much of your money is being received on the other end of the transfer to determine whether you’re getting the best deal. 

TransferWise prides itself on fairness and transparency.

A 3rd party research company Consumer Intelligence did an independent study on TransferWise and 21 other bank accounts around the world in January 2018. 
The study wanted to see if making an international money transfer through TransferWise was truly cheaper than other banks. 
The result: It was much cheaper to use TransferWise. 
For Germany, the study concluded it’s up to 4x cheaper to use TransferWise to send money internationally than the German banks Deutsche Bank, Postbank, and Sparkasse. 
For the UK, the study concluded it’s up to 9x cheaper to use TransferWise to send money internationally than UK banks Barclays, NatWest, and Lloyds Bank. 

What to remember: 

The most important thing to remember is that you can save a lot of money by choosing the right international money transfer service. From my experience, TransferWise has always been the cheapest, fastest, and safest service. 

If you’re ready to open a German bank account, click here for our guide on bank accounts for expats in Germany!

*Full Disclosure: Some of the links we use on this website are affiliate links. By using those links, you help keep our website free. There is no additional cost for you. We also want to note that we only recommend services we trust and that we would use ourselves.

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