Payment Methods for Money Transfer

Table of Contents

• What is a Payment Method?
• Types of Payment Methods
• What are various Payment Methods available?
• Bank Account
• Multi-Currency Bank Account
• Credit Card
• Debit Card
• Wire Transfer
• Cash
• Google Pay
• Apple Pay
• iDEAL Payment System
• POLi Payments
• Trustly Payment Method
• Sofort Payment Method
• Dotpay Payment Method
• Servipag Payment Method
• Tap & Go Payment Method
• Pin Debit Transaction
• FPX Payment Method
• WU Pay
• How to manage Payment Methods?
• Which Payment Method should you use?

When you want to send money home, there are multiple payment options around how you want to pay and how your recipient wants to receive money; in a couple of back to back blog posts, we will go through some of these.

In this blog post, we will discuss Payment Methods for remitting money.

What is a Payment Method?

A Payment Method, in general, is how you pay for a service or a commodity. For example, using a credit card to do online shopping, or using a debit card at a grocery store are examples of using various forms of payment.

In the context of an international money transfer (also called a remittance), a Payment Method is how you pay your Remittance Service Provider (either a bank or a private institution that facilitates money transfers) for the intended money transfer.

A remittance Payment Method is how you pay for your overseas money transfer.

The aggregate amount you pay to your service provider would be the amount you want to send plus any applicable fees or charges that the service provider may charge you to use their money transfer service.

In this article, we will list the most frequently used payment methods, along with a short definition, advantages, associated fees, etc. for each payment type.

Types of Payment Methods

For the purpose of funding your money transfer, you have the option to use international payment modes of payment or local ones. Generally, electronic payment methods will result in faster transactions vs non-electronic ones like cash.

Below we list various types of payment methods.

• International payment methods like major credit cards
• Local payment methods that are specific to a country, state or city
• Electronic payment methods like debit cards and ACH bank transfers
• Non-electronic payment methods like cash

Payment methods can be international or local, as well as electronic and non-electronic.

In the rest of this article, we will present the best online payment methods you can use to remit money overseas.

What are various Payment Methods available?

You have different payment methods to choose from when it comes to paying for your overseas funds transfer. Below, we discuss some widely accepted payment methods for your remittance needs.

Bank Account

Paying with bank account (also called ACH payment method) usually entails providing the service provider with your routing and account number so that money is directly debited from your bank account.

The setup process often involves a validation process whereby you have to confirm a debit/credit pair of transactions posted to your account - hence it may take a few days for this setup to finish. This could be a downside if you want to send money home instantly.

Since the service provider gets the money quickly, and since most banks do not charge for bank to bank money transfers, usually service providers do not charge any fees when using this payment method. As a result, the frequency of this could be high.

Paying with ACH bank transfer is easy, fast, secure and generally free, but may take few days to set up initially.

Multi-Currency Bank Account

A multi-currency bank account is a special type of bank account that can hold money in multiple currencies at the same time.

Multi-currency bank accounts are a very convenient choice if you need to travel abroad frequently, and therefore, need to access and use your money in many currencies. In other words, if you need a truly international bank account, then the multi-currency account is for you.

You can access and use your money in various currencies with a multi-currency bank account.

Your money does not physically move when you use a multi-currency bank account. This is because your funds are held in the same account with the same banking institution. As a result, using a multi-currency account as a payment method provides instantaneous funds in the desired foreign currency.

Credit Card

Credit card payments are instantaneous so there is usually no wait time which helps if your need is to send money home instantly. The downside, however, is that most service providers charge some fee when you pay with credit cards. You may also have to pay charges for credit usage to your credit institution.

Debit Card

Like Credit Card payments, Debit Card payments are also instantaneous. Also, the associated fees could be lower than credit cards since the service provider does not have to pay credit card processing fees to a credit card company.

The minor disadvantage compared to credit cards could be that you will need money available at the time you use your debit card, while credit card allows you to borrow money from your credit card company.

Wire Transfer

Wire Transfer payment method entails wiring money from your bank account to the service provider. Most banks would need you to fill a form with the possibility of even going to the bank branch, so this might be a slower option.

Additionally, most banks charge customers to wire funds, although this fee may be waived depending on your relationship with your bank, or of you maintain certain thresholds of funds in your account.

Credit and debit cards, and wire transfers are convenient electronic payment methods; credit cards and wire transfers may involve high fees though.

Cash

The Cash payment method usually works only for service providers that have an agent model whereby you would go to a physical brick and mortar location and use cash to fund your money transfer.

Numerous global remittance companies like Western Union, MoneyGram, etc. follow this business model whereby they have numerous worldwide locations where you can send money paying with cash. There are usually high fees associated with using cash as a payment method.

In addition, there are also cash sending apps available that help send cash online.

Google Pay (G Pay, formerly Android Pay)

Google Pay or G Pay is a Google payment method, and is a digital wallet developed by Google to online payments using your mobile phone. Google Pay is available on Android phones, and on iOS devices with limited functionality.

Many money transfer operators support Google Pay and allow you to fund your money transfer with it.

Apple Pay

Like Google Pay, Apple Pay is another digital wallet and online payment system developed by Apple. You can use Apple Pay to pay as a payment method for your remittance if the service provider accepts payments with it.

Google Pay and Apple Pay are digital wallets that can also be used to pay for your money transfer.

iDEAL Payment System

iDEAL is an online banking based payment system used in the Netherlands. The key features of the iDEAL electronic payment system include real time transactions, security and low cost.

iDEAL payments in Netherlands is owned by the Dutch organization Currence, and processes billions in payments annually.

If your provider accepts iDEAL payments in the Netherlands, you can use the iDEAL payment method to fund your transaction.

POLi Payments

POLi is an online payment system prevalent in Australia and New Zealand, and is a popular choice to make payments.

POLi removes the need to use credit and debit cards, and allows electronic transfer of funds via internet banking. Several global remittance companies like Instarem, Wise (formerly TransferWise), WorldRemit, Western Union and Skrill support paying with POLi.

Trustly Payment Method

Trustly is a Sweden based online payment system based on internet banking, whereby funds are directly drawn from your linked Trustly account at your local bank.

Much like the other online payment gateways discussed earlier, Trustly also makes payments contactless by removing the need to use physical cards or cash. Trustly operates in several European countries as well as Australia, Canada and the US.

You can use Trustly payment to pay for your money transfer if your money transfer operator is integrated with them.

Sofort Payment Method

Sofort, also called Pay Now, is a popular online banking system used in many European countries. In 2014, the Sofort payment gateway and Sofort app were acquired by Klarna.

Sofort direct banking facilitates secure transactions by using internet banking to pay for any online payments. You can use your linked Sofort bank account to avoid exposure to your actual bank account.

You can also use Sofort bank transfer to pay for your money transfers if your provider offers support for it.

Dotpay Payment Method

Dotpay is a widely used online payment system used in Poland, and is supported by all major Polish banks.

Merchants, including remittance companies, integrated with the Dotpay payment gateway allow customers to pay with Dotpay. This ensures funds come directly from your bank account without the use of any cards or cash.

Servipag Payment Method

Servipag is a very popular payment method in Chile. It allows customers to pay directly via bank account debit using retail cards, or via cash vouchers at merchants that accept Servipag payments.

There is no need to use credit cards with Servipag, and a lot of Chileans rely on Servipag for making various payments.

When sending money from Chile, Servipag can be a convenient and secure choice.

Tap & Go Payment Method

Tap & Go, also called "Tap N Go" or "Tap and Go", is a mobile wallet that allows for contactless payments using your mobile phone. It is a very popular form of payment in Hong Kong.

If you have a Tap and Go card or account, you can make payments to a multitude of merchants that support Mastercard and UnionPay payments.

Pin Debit Transaction

A pin debit payment is a form of electronic funds transfer (EFT) payment that authorizes the transfer of funds in real time. When using a debit card, you are making a pin debit if you also provide your personal identification number (PIN).

A pin debit payment is cheaper than using your debit card in offline mode whereby it works similar to a credit card. Any pin debit network fees that may be applicable are generally charged to the merchant.

There are numerous online banking or digital wallet based payment methods available in various parts of the world. Make sure to check the ones available in your country.

FPX Payment Method

FPX (Financial Process Exchange) is one of the most popular types of payment system in Malaysia, allowing customers to make online payments from their bank account.

The PayNet group, which includes Bank Negara Malaysia (BNM), the Central Bank of Malaysia, operates FPX payments in Malaysia. FPX has gained a lot of popularity and is one the most widely used payment methods in Malaysia.

WU Pay

WU Pay is an online payment method in the US that allows you to make internet based transactions, and pay for them later using cash or your bank account at Western Union locations.

WU Pay is popular as you do not need to use credit or debit cards, and is a secure way to fund your money transfers sent via Western Union.

How to manage Payment Methods?

It may be a good idea to have multiple payment methods configured with your service provider. Having alternative payment methods gives you the flexibility to choose the one that suits your needs best.

Once you sign up with your money transfer company, they will typically have an account management part (for example, My Payment Methods or Payment Settings, etc.) where you can:-

• see a list of saved payment methods
• add new payment method
• change payment method
• remove payment method
• set a default payment method
• change payment method name

Which Payment Method should you use?

The answer is, it depends. Based on your needs around urgency of money transfers, fee tolerance and convenience, you may choose different payment methods.

Obviously, you will want to balance your decisions with the exchange rate you get, which will have a direct impact on how much money your recipient gets. Try RemitFinder to see how we can help you save on your next money transfer.