Categories: Finance

How Money Transfers work

There are several options available to consumers who want to transfer money to another location quickly and conveniently. Comparison sites such as Money Supermarket provide an easy way to compare options and make sure you are not paying over the odds for the transaction.

In the past if you wanted to transfer money you would have to physically visit a provider who would ‘wire’ money to your selected recipient. You would hand over cash and they would process your request, send a message via telegraph lines to another provider in the country of the recipient and that provider would issue cash to the recipient. This was a slow and laborious process, but thankfully it’s much simpler these days.

What Is an Online Money Transfer?
An online money transfer allows you to transfer money in a completely electronic process from one account to another. There is no need to visit a bank or other provider as you can complete the process online and even use your mobile phone.

No actual paper money has to exchange hands as transfers are made by sending encrypted data from one account to another. This is similar to the way you receive your salary from your employer’s bank account into your own bank account. Depending on the money-transfer service you choose, the money can be transferred instantly or within a few days.

One of the best known online money-transfer providers is PayPal. PayPal is well known for offering an online payment service, but you can also transfer money into another account by simply entering the email address attached to the recipient’s PayPal account.

PayPal sends funds from the bank account you have linked to your PayPal account to the bank account linked to the recipient’s PayPal account. This is an easy-to-use service, but PayPal money transfers are not instant and usually take a few working days.

More recently, it has become possible to transfer money using an app on your mobile phone. This service links the user’s bank account with their mobile number and allows money to be transferred by entering the recipient’s mobile number. There is no need to give out your account details to a third party.

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There are fees involved in using an online money-transfer service and these can vary greatly depending on how much money you are transferring and how quickly you want the money to reach the recipient.

Are Online Money Transfers Safe?
By using this system you can send money anywhere in the world without having to divulge account information. Online money transfers use a highly encrypted process to protect sensitive information, so if the server is hacked during the process your details will be protected.

Money transfers are processed by an independent body, the Automated Clearing House, which provides secure data transmission. Additionally, many services offer insurance to guarantee the money transfer and security of your accounts.

When using any financial service, make sure you take time to research your options and choose the product that offers the best value. Contact the provider if you have any questions and read the terms and conditions thoroughly before entering into an agreement.

Article written by Karl at MoneySupermarket Europe’s leading comparison website

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