6 Modern Alternatives To Bank Wire Transfers of Money


Anyone who has ever had a relative studying abroad or has had to send funds home to family knows the pain of using the bank to do so. There’s the time and inconvenience of standing in the bank line. Even online, there are complicated forms to fill out. Then there’s the cost.

You can spend as much as US$45 to send a bank wire transfer, sometimes more, depending on where you live and where you’re trying to send the money to. It also isn’t as “instantaneous” as is sometimes claimed and it can take anywhere from several hours to days for the funds to get to the person who needs it.

That’s because when you use the bank, it’s like using a chain of hands to pass the money to your relative who needs it. Every single pair of hands it passes through adds to the cost. Even when the money is theoretically in the account, bank protocols may prevent the recipient from spending it until they are completed.

What’s worse is the technology by which banks wire transfer money hasn’t been updated in nearly 60 years.

If you’re wondering whether there are faster, lower-cost ways you can transfer money, look no further. Depending on the reason you need to transfer money and the amounts involved, you have other options. We’ll give you 6 modern alternatives to traditional bank wire transfers.

1. Transferring over the ACH network

Of all the forms of transfer, this one is probably the most similar to a bank wire transfer. Where a bank wire transfer relies on individual members of a bank to bank network to get the funds from sender to recipient, the ACH network relies on something called batching.

Before we get ahead of ourselves though, ACH stands for Automatic Clearing House. Like bank wires, this is an electronic form of money transfer. Unlike bank wires, several thousands of these transactions are processed at the same time, in what is known as “batches”.  This enables transfers done this way to move faster than bank wires.

You’ve probably used or gotten money through the ACH network and have not realized it. If your employer directly deposits your salary to your account, it is likely it was done through the ACH network. If you’ve stipulated that your bank automatically deducts funds for payment of your utility bills or insurance payments, then that process is also done by ACH.

One possible drawback is the difficulty you may have in getting your money back if it was routed to the wrong person or account.

The ACH is best when you have payments that are relatively low priority and are not large sums.


2. Electronic Fund Transfer (EFT)

The Electronic Fund Transfer category covers a very wide variety of ways to transfer money electronically. Technically, both bank wires and ACH are included under this banner.

For the purposes of this article though, we’ll use the term ETF to refer to payments made by debit and credit card.

There was a time when overseas business transactions and payment for services were conducted by bank wire transfer, money order, or cheque.

These days, unless you are dealing with very large sums of money, you can arrange to make payments for foreign goods and services with your debit and credit card.

Through advances in chip and pin technology, you can securely transfer funds from your account to the vendor’s account at minimal cost to you and for no charge to your recipient.

Users are always cautioned to keep their card and account details secure.

3. Peer to Peer (P2P) payment apps

Fintech experts are predicting that peer-to-peer or person-to-person payment apps will become the most popular method of transferring funds over the next several years. As it currently stands, hundreds of billions are already being sent annually via p2p apps like Sikhona, which allows you to send and receive money via your mobile phone. You pay minimal fees to send money to your recipient. Many times your recipient can collect the money for a very small fee or for free.

There are several of these apps and they function in different ways. Some of them are better for online shopping. Others can be connected to your online marketplace and facilitate your getting payments from customers for goods and services. Still, others can allow you to collect salary payments for remote work.

Ultimately you will have to decide based on the combination of features which p2p is right for your needs.

4. Money transfer company

Western Union and Moneygram are examples of money transfer companies.

These companies are especially useful if you need to send money quickly and need it to get there in a short space of time. They are popular with people who send remittances to family in other countries.

They utilize the same ETF technology that many of the other methods use. An agent collects fiat money and the recipient’s details and charges the sender a fee for transmitting these funds electronically.

The major difference here is that money transfer services allow people who do not have access to traditional banking services, the Internet, or a mobile phone to send and receive money.

5. Bitcoin and other cryptocurrencies

If you want to go really high tech, you can transfer money using cryptocurrencies.

Bitcoin is currently one of the most popular ones.

To use this method of transfer, both you and your recipient need to have the ability to send and receive bitcoin. You have exchanged your fiat money at a bitcoin vendor. The vendor transfers the sum to your recipient’s bitcoin wallet. Your recipient can then change their bitcoin to fiat money.

This method may tend to range to the expensive side as it is still somewhat uncommon.


 6. Neobanking

This method of money transfer does away with the physical bank entirely. A neobank is based entirely online.

As such, services currently offered by them are relatively limited since there isn’t much legislation or insurance support.

However, most of them do offer money transfer services built on several of the technologies we’ve described before, particularly p2p. Their services are also very low cost, like p2p transfers.

You may think that you’re stuck with bank wires, but you’re not. Explore your options and find something that works for your needs



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