Understanding the costs of international transfers can be a tricky business. The fees vary depending on the type of payment you’re making, and where it’s headed.
With Western Union, there are also different charges depending on whether you fund the payment with a bank transfer, cash, credit or debit card - and how the recipient accesses the money, as well. It can cost a lot more to send a transfer using a credit card, to a recipient wishing to collect the cash immediately in person from a Western Union, compared to a bank transfer from one account to another, for example.
Here’s what we’ll cover:
- Western Union limits
- Western Union service costs and fees
- Western Union exchange rate spread, and the costs involved
Understanding the different options and costs involved in making a Western Union transfer can help you decide if it’s the best route for you. Here’s all you need to know.
Western Union can be a convenient choice for sending money to friends and family. You can make a transfer to a bank account, or have the recipient collect the cash from a Western Union location somewhere convenient for them.¹ It’s possible to fund transfers using cash, bank transfer, credit or debit card.² However, the costs can be high if you’re sending money using a credit or debit card, or if your transfer is headed abroad.
If you need to make a transfer directly to another bank account, which requires a currency conversion, you might be better off choosing a specialist in international money transfers like TransferWise. We will look a little more in depth at the different options and costs later.
There are some limits to how much money you can send with Western Union. The exact amounts vary depending on your own transaction history, whether you’re sending money domestically, or overseas, and the exact payment route.¹ Some states also have their own limits which might vary from elsewhere in the US.¹
For international transfers, you might have to provide information about the transfer purpose, and fund source, to ensure compliance with anti-terrorism and money laundering regulations. Transfers to and from some countries are prohibited under US law.
Generally, you’ll find the following limits apply:¹
- Payments arranged online or using a smartphone
- Sending money using In Minutes and Three Day - $2,999 per transfer
- Next Day payments and Mobile Money transfer - $500 per transfer
- Prepaid payment cards - limits set by the card issuer, and can vary
- Payments arranged at agent location - usually unrestricted
- Payments arranged on the phone - $300 to $2,500 depending on the exact transfer details
The fees charged by Western Union vary according to where you’re sending money, and also the payment method. Some of the steepest fees you’ll run into are from international money transfers with Western Union.
Here are the charges you need to know about:
|Western Union international transfer||Fee²|
|Western Union International Transfer Fees||Fees vary, depending on how you fund the transfer and how your recipient gets the money. For example - sending USD 1000 to a recipient in Canada will cost between $10 and $95 depending on the payment method. More on this below.|
|Exchange rate markup||Varies per currency. Western Union confirms the markup on their Send Money Online page: “Western Union also makes money from currency exchange.”|
|Inadequate funds fee||Fees vary|
|Cancellation, query and alteration fees||Fees vary|
Not all payment options are available in all countries and currencies, so you’ll need to check the specific details for your transfer.
If you choose to send money with Western Union, from the US to Canada, it’s only possible to do so by having the recipient pick up the cash from a Western Union location.² Sending money with TransferWise allows you to have the money securely transferred to a recipient’s bank account in Canada.
Here’s a comparison of what the costs will be to send USD 1000 to CAD, using both TransferWise and Western Union. In both cases, this assumes the transfer is funded by a bank account - not credit or debit card - and processed by wire transfer.
|Exchange rate||Markup on the mid-market rate||Real mid-market rate|
*Information taken from September 3,2018
As you can see the lower fee can be found with TransferWise and also TransferWise doesn’t inflate the exchange rate at all which is a technique most services use to make a profit and charge an invisible fee. It’s worth noting that the costs could be significantly higher if you want to use a different payment method. Western Union, for example, charges USD 95 for a payment processed by bank credit or debit card², while TransferWise will charge an additional fee of USD 18.16 for a credit card transaction but no additional fee when paying with a debit card.
Banks and money transfer providers often give you a bad exchange rate to make extra profits.
TransferWise is different. It's smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world. Which means you can save up to 8x by using TransferWise rather than your bank when you send your money abroad.
Check out how to make your first transfer with TransferWise. And give it a try.
Oh, and while you’re at it, check out TransferWise’s borderless multi-currency account. Where you can manage and send dozens of currencies all from the same account.
Now, back to what you came here to read.
Western Union allows payments both at home and abroad, using a variety of methods. You can pay in cash at their pay-in store, online using a credit or debit card , or via a bank transfer.² Your recipient can then collect their cash at a Western Union location near to them, or you can arrange to have the money sent directly to their bank account or even mobile wallet.² Not all payment and recipient options are available in all countries.
The fees for Western Union international transfers vary a lot depending on both how you want to fund the transfer, and how it’s received.
For example, if you wanted to send USD 1000 to a friend in Australia, and they needed to collect it in person, it would cost you USD26 if funded from your bank account - but the same transaction would cost USD81 if you pay using a credit or debit card.²
On the other hand, if you are able to pay the USD 1000 into your friend’s bank account directly, this transaction will cost USD5 if you pay from your bank account, and USD40 if you fund it with a credit or debit card.²
Here’s what Western Union say in the Send Money Online page² in the footnotes, relating to international transfers:
“Western Union also makes money from currency exchange. When choosing a money transmitter, carefully compare both transfer fees and exchange rates. Fees, foreign exchange rates and taxes may vary by brand, channel, and location based on a number of factors. Fees and rates subject to change without notice.”
To really understand what Western Union means here, you need to understand a bit about the mid-market rate. That’s the only real exchange rate and the one that banks and financial institutions use when trading currency on the open market. You can check the mid-market rate using an online currency converter, or by googling the currency pairing you need.
And this is where customers should be wary. It is true that many foreign exchange and international money transfer services do not use the mid-market rate to complete transactions. However, there are services out there, such as TransferWise, which believe it is fairer - and better value for customers - to use the mid-market rate and apply only a small transparent fee to each transaction.
In many cases, the spread applied by banks and foreign exchange services can add a significant cost to the customer. Using a provider who sticks as close as possible to the real exchange rate, can make a significant difference.
Western Union can be a very convenient service and offers a wide range of options for both the sender and recipient to make sure, that the transfer is quick and easy. However, in some cases, you’ll pay a high premium for this convenience. If you’re looking to make an international transfer from one bank account to another, you could find it is much cheaper to use an alternative provider such as TransferWise.
Whichever service you choose to use for your money transfer, remember to check out the full range of fees, and any additional charges rolled into the exchange rate spread. Although some banks and money transfer services may claim to offer a fee-free service, the costs will be passed on to the customer somewhere - often in the exchange rate used. By being aware of the mid-market rate, and reading all the small print, you can make sure you get the best deal available for your needs.
1.https://www.westernunion.com/us/en/customer-care/cc-faqs.html (October 3, 2018)
2.https://www.westernunion.com/us/en/send-money/app/start (October 3, 2018)
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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