Comparison of Money Transfer Methods

[OnMyWay]

I put this together for a few reasons.  A.  BPI has stopped taking USD checks for deposit.  Temporary but I want to be prepared, just in case.  B.  A neighbor was telling how great Remitly was.  C.  There was another discussion going on in the wrong group.

This is all for USD to Pesos but the results probably hold true for other major currencies, transferred to Pesos.

There are two spreadsheets pictured below.  The first one is for a $2001.99 transfer and the second for a $5001.99 transfer.  Why that odd amount?  World Remit charges their fee on top of the amount you transfer.  The others deduct the fee from the amount your transfer.  So to make it as close to "apples to apples" as possible, I made all the amounts like World Remit.

I use XE.com as a base rate to compare to the services to see if the service has a good exchange rate.  XE is mid-market rate and it is rare that a retail money changer will be close to that rate.  When I change dollars at BPI, I usually get 15-30 centavos less than XE.  When I take the dollars outside to change, I can usually get 5-20 centavos less than XE.  For this comparison, I use a worse case scenario of XE less 30 centavos.  You can see where I used these, highlighted in red.

All of these methods are "bank account to bank account".  The transfer services offer other methods of payment and pickup, but with additional fees and higher total cost.

@Arizona Kid

ATM withdrawal methods are not included here because it is very hard to make an "apples to apples" comparison.  You are withdrawing a fixed amount of pesos and then working backwards with service charges and exchange rates to find out your true cost in dollars.  ATM withdrawals are generally an expensive option unless your bank refunds all fees.  Even then, you need to check the exchange rate they are giving you to get your actual cost.  The 3 banks I can think of that refund all fees are USAA, Fidelity and Schwab.

1.  Two methods require setting up a USD account at a Philippine bank.  "Chase Wire Transfer" could be any bank but Chase is my U.S. bank.  The wire transfer fees are for Chase and BPI.  Yours might be different.  "Check Writing" means writing a dollar check to yourself, from your U.S. checking account, and depositing it in your Philippines Bank.

A.  Check writing.  Still the cheapest method even though most banks now charge a $5.00 fee for the deposit.  Advantages:  Cheapest method, you choose when and where to exchange and the rate.  Disadvantages:  It takes 3-4 weeks for the dollars to be available.

B.  Wire transfer.  Advantages:  Quick for larger amounts.  For a Chase/BPI wire, fees are fixed up to $25,000.  Disadvantages:  Expensive if you are transferring a smaller amount.  Slower than the other transfer services.  (Note:  It is possible to wire transfer dollars to a peso account, but then you be at the mercy of the banking system when they change dollars to pesos.)

2.  The money transfer service winners!  Transferwise and World Remit

A.  Transferwise is the clear winner and this it due to their extremely high exchange rate.  Their rate claims to be a mid-market rate and appears to be very close.  They make their money on the variable fee, but even with that they are the cheapest.  They are competitive with check writing.  If you are in no hurry, check writing will still save money.

B.  World Remit charges a tiny fee but they make some money from the exchange rate.  A close second to Transferwise.

3.  The losers!  Xoom and Remitly

Don't use these!  They make a killing on the exchange rate.  Years ago I used to use Xoom and they were the best.  Then they were bought by Paypal and it was all downhill.

$2001.99 chart

$5001.99 chart

 

 

 

[Vansihing Shadow]

I agree Transferwise is much better.  I used Remitly for a couple of transfers when I first retired here and was amazed at the difference in money I was able save on my transfers when I switched over to Transferwise.

[intrepid]

I have been using BDO and check writing and waiting.  When there was a special need I have used Xoom to my bank account or for family "cash pickup".  What I do like about Xoom is the transfer is ready for pickup within minutes.  The fees are higher but fast.  I never used Transferwise and just checked them out for the first time.  Plugging in my numbers it stated the money would be available on April 7th, thats four days.  Is that the norm or is it faster once set up?  Most times I can wait four days but there are some times fast is needed.

[Huggybearman]

19 minutes ago, intrepid said:

I have been using BDO and check writing and waiting.  When there was a special need I have used Xoom to my bank account or for family "cash pickup".  What I do like about Xoom is the transfer is ready for pickup within minutes.  The fees are higher but fast.  I never used Transferwise and just checked them out for the first time.  Plugging in my numbers it stated the money would be available on April 7th, thats four days.  Is that the norm or is it faster once set up?  Most times I can wait four days but there are some times fast is needed.

I only really heard about Transferwise yesterday evening (Thursday). So I set up an account and did two test transfers of £50 from my UK bank using my debit card. Both arrived in my BPI account within ten minutes. Very impressive!

As a comparison I sent my usual monthly SWIFT transfer from my UK bank direct to my Phil’s account early on Wednesday morning. I am still waiting for it to arrive more than 48 hours later. 
Not at all impressive! I think I shall use Transferwise from now on. And much cheaper as well!

Edited April 3, 2020 by Huggybearman

[GeoffH]

Interesting (and useful) but you didn't include Western Union in your spread sheet?

I use either World Remit or Western Union (mostly Western Union).

At the moment 1 AU$ buys 30.45 peso with World Remit and 30.56 peso with Western Union.

And World Remit charge $2.99 AU for a bank transfer where as Western Union do $0 bank transfers.

Which means that Western Union is also cheaper than World Remit.

 

I can't compare Transferwise because I don't have an account.

[OnMyWay]

1 hour ago, intrepid said:

I have been using BDO and check writing and waiting.  When there was a special need I have used Xoom to my bank account or for family "cash pickup".  What I do like about Xoom is the transfer is ready for pickup within minutes.  The fees are higher but fast.  I never used Transferwise and just checked them out for the first time.  Plugging in my numbers it stated the money would be available on April 7th, thats four days.  Is that the norm or is it faster once set up?  Most times I can wait four days but there are some times fast is needed.

I'm not sure about Transferwise as I have never used them.  I don't think I have done a service transfer since 2012 or 13.  All check writing except when I bought my house I had to do some wire transfers.

I hope someone else can comment as I think it is the most popular right now.

[Arizona Kid]

Thanks for all the info. Just sounds a little too confusing for my old brain. I'll just stick to what has worked for me the past 17 years.

[OnMyWay]

11 minutes ago, GeoffH said:

Interesting (and useful) but you didn't include Western Union in your spread sheet?

I use either World Remit or Western Union (mostly Western Union).

At the moment 1 AU$ buys 30.45 peso with World Remit and 30.56 peso with Western Union.

And World Remit charge $2.99 AU for a bank transfer where as Western Union do $0 bank transfers.

Which means that Western Union is also cheaper than World Remit.

 

I can't compare Transferwise because I don't have an account.

Honestly, Western Union dropped off my list years ago and I forgot to look at them now.  Why did they drop off my list?  I think it was because I got a bad taste from them years ago in Germany or maybe early here in my Philippines years????  Super high cost was what I experienced but that may have been for counter to counter or credit card or???  And I remember back then they were still very manual and I don't think they had online services yet.

I just looked and they are pretty good now.  $2001.99 will get you  p100538.56.  No fee, exchange rate 50.21.  Transferwise will get you 100,748.11, about p210 more.  So WU is in the ballpark of World Remit and Transferwise.

[gbmmbg]

I have used western union for the last three years. I used to pay a 3.99 fee to use my debit card and direct from checking was free. The card would hit the bank here in 1 hour and 2 days for the checking. I don't know what happened last year but they both started to show up in one hour so I stoped using the card. Exchange rate is not bad.

[Dave Hounddriver]

It is hard to compare all the methods because they change.

A month or a year from now their fees may have changed like Moneygram did to me.  A couple of years ago I had a friend in the US who would send my money to me via Moneygram.  Perhaps they had a special on but the fee was only $5 back then and I could instantly pick up US$ in cash at any L'Huillier.  With the bonus for exchanging actual US cash in the Philippines (rather than doing it through online methods) I easily made up the $5.  But now I see their fee for sending US$1,000 is up to $16

And the methods do not work the same for everyone.  My experience with both Moneygram and Transferwise is that the fee is diferrent depending on which country the sender is sending from.  That said, it is a great comparison in the opening post.  Respect to OnMyWay