Some points to remember while sending money from one country to another

That means for every $100 you want to remit abroad, you really only send around $93 on average. This varies depending on how you move your money and by where you’re sending money to and from. For example, remitting from a Group of Twenty (G20) country will on average cost just more than 3% if it’s going to India, but more than 6% if it’s going to South Africa. When money is sent within Sub-Saharan Africa, fees can be as much as 20% of the amount.

It helps to know that there are two main components of the cost in sending money abroad: the fees of the bank or transmitting entity you use, and the foreign exchange margin they make when they buy at the lower end of the currency exchange rate and sell at the higher end. You should check both before you move any money. You’re getting a good deal if your total cost — fees plus the currency exchange margin, is lower than 5% of the transaction amount. If you’re being offered 8% of the amount, that’s generally too much.

You should also consider where you go. There are four entities that will do the job: banks, credit and debit cards, traditional money transfer firms and fintechs. No surprises here that the banks and cash transfers cost the most and fintech firms the least. If the country you’re remitting to allows for exchanging mobile money through e-wallets, then that’s likely to be the cheapest way to send and receive money. Find a licensed, regulated entity that works between the geographies you want to move money between, and check if the total cost is less than 5%.

Cost isn’t the only consideration either. Perhaps it’s worth paying the higher bank transfer fees because you get the greatest sense of security from going through that institution. It usually helps to find others who have made similar payments and see what worked best for them. Are you sending money back to your family on a regular basis? Then you’ll want a cheaper fintech solution if possible, otherwise a bank will remain your friend.