If you are looking to send money to someone in another country, doing a little research can help you find the service that meets your needs at the best cost. The transfer of money to someone in another country is sometimes called a “remittance.”
In Canada, most people send money to other countries through private companies, sometimes called “money transfer organizations.” These services are offered at many post offices, grocery stores, pharmacies, currency exchanges, travel agents, cheque-cashing outlets and other businesses. Banks and credit unions also offer money transfers.
The business or financial institution in Canada sends the transaction details to an agent, business or bank in the other country, which then provides the funds to the person to whom you are sending money. Depending on the service, there may be options to receive the money, such as:
FCAC oversees banks and other federally regulated financial institutions in Canada. By law, these institutions must disclose to you the amount charged to send money internationally. These regulations do not deal with charges that could apply in other countries where the money will be received.
FCAC does not regulate other money transfer organizations. Another federal government agency, the Financial Transactions Reports Analysis Centre of Canada (FINTRAC), does oversee regulations to prevent money laundering.
What are the total fees?
Fees can make it expensive to send money to another country. Ask about all the fees, so you don’t end up paying more than you expected.
Some businesses and banks charge a set amount to send any amount of money. Others may have fees that depend on the amount you want to send.
These fees can vary greatly from one business or bank to another, and even by the country where you want to send money. Be sure to shop around so you can get the best deal.
Is there a financial institution that operates both in Canada and in the country where you want to send money?
If so, check whether that financial institution offers money transfer services at a lower cost than others do.
How much money will the person in the other country receive?
In addition to the fees charged to you, the recipient (the person to whom you are sending money) may have to pay a fee or a tax to collect the money.
If you transfer money on a prepaid card, the cardholder may have to pay fees to use it.
Changes in the currency exchange rate can also affect the amount the recipient will receive when he or she collects the money.
Ask whether the amount the recipient will get is set or guaranteed at the time you make your payment.
Some businesses make a profit on the transfer by charging a higher than usual exchange rate and keeping the difference. If the exchange rate is not disclosed to you, be sure to ask about it to confirm whether it is reasonable, compared to other currency exchange services.
Can you get a discount?
Find out whether you can get a discount for repeat business—it can’t hurt to ask!
Some businesses may offer a reduced rate if you send a large amount of money.
Does the money transfer business have a good reputation?
Make sure the business is trustworthy before you hand over your money. If you don’t know the business that is offering this service, check with the Better Business Bureau and ask family, friends and members of the community about their experiences.
What protection is in place to make sure the money is received?
Check to see whether there is any kind of protection or guarantee in place to make sure the recipient gets the money, and how you can confirm that person has received it.
How can you make arrangements to send money?
Depending on the service you choose, you may be able to set up the transaction in different ways, including:
You may be able to make your payment by:
Always get a receipt and a transaction number for the money you send so you can trace the money transfer if you need to.
Check whether there are different fees depending on the payment method.
If you use a credit card to send money, the transaction may be considered a cash advance. This can make it much more expensive to send money since there is no interest-free period for cash advances. Interest is charged from the day you withdraw the money until the day you repay the amount of the cash advance in full.
How long will it take for the money to arrive?
You may have the option to send money faster, but this service usually comes at a higher cost. Think about whether paying more for the faster delivery of the money is worth it.
How and where can the recipient get the money?
How easy will it be for the recipient to get the money? For example, a prepaid card may not be a good choice if the recipient’s country doesn’t have automated bank machines or stores with terminals that can accept electronic payments.
Ask how and where the recipient can collect the money. If there isn’t a location close to where the person lives, it may not be practical.
Do you need to show identification (I.D.)?
Ask what type of I.D. or other documents you may need to provide when transferring money. Check if there is a specific type of I.D. the recipient will need to show to collect the money. If so, make sure the recipient has this type of I.D.
What happens if things go wrong?
Problems can occur with money transfers. For example, it may take a long time for the money to arrive.
Be sure to find out what steps you should take and whom you should contact if there is a problem.