Sending Money Internationally in the 21st Century

· 5 min read
I actually think I can use any century as the title, sending money internationally is a needlessly complicated and confusing process. My brother is currently living in Spain and I live in Colorado. We are both originally from Puerto Rico. A week ago he called me and asked me to send him some money because he was beginning to run dry. He setup a bank account with the Puerto Rican branch of Banco Santander, since it is a company that is based in Spain, hoping that he can just transfer money easily between the Puerto Rico and Spain branches. He couldn't have been more wrong. Apart from the name, logo, and overall color scheme, the two banks have nothing to do with each other according to the people we spoke to. They can, however, make a wire transfer to the bank in Spain. Since I am not in Puerto Rico, I decided to just send him money from my own bank account. This is basically the same process that Santander was going to do, with the exception of, the Santander bank has a list of the SWIFT numbers and can just look it up there, while my local Washington Mutual, being much larger and a national instead of a regional bank, does not. A quick internet search solved this however. Wire Transfer from an American Bank
Required Information:
    My NameMy Account Number / MoneyRecipient's NameRecipient's AddressRecipient's Bank NameRecipient's Bank AddressRecipient's Bank SWIFT NumberRecipient's Bank IBAN NumberRecipient's Bank Account Number
Amount: $1300 Time: 5-7 Business Days Fee: $60~ (certain banks waive this fee, to certain accounts) Received: $ ?
My brother needs the money asap so that is really not an option. The 5-7 Business Days is just a ridiculous amount of days. The teller suggested Western Union, so I went to on my iPhone and checked through there. This is actually a fabrication. The domain does -not- work. It just hangs, you have to visit for it to work. It is a simple issue of setting a 301 redirect, and it is really annoying. Maybe its just that its today that its broken, it just annoys me and I had to mention it. It is also pretty annoying to use on the iPhone. I had to wait until I got to a computer. Western Union has two Western Union - Money In Minutes
Amount: $1300 Time: "minutes" Fee: $102 Recieved: €804 exchange rate: (May 14, 2008): 1 USD = 0.646418 EUR Western Union rate (May 14, 2008: 1 USD = 0.619103 EUR Actual Fee: $159
The second one, called 'economy' takes 3 business days. Moneygram has a calculator
The calculator made it quick and easy to see how much it costs to send money.
Amount: $1300 Time: 10 minutes Fee: $26 Recieved: €781.51 exchange rate: (May 14, 2008): 1 USD = 0.646418 EUR Moneygram rate (May 14, 2008: 1 USD = 0.601163 EUR Actual Fee: $117
While the sending fee is quite modest, they screw you on the exchange rate. I guess they figure after I send the money I will never talk to the other person to know how much they got.
This is the conclusion that was very hard to come to terms with. Paypal is not a complete rip-off as long as you plan ahead. To a Personal Bank account:
Amount: $1300 Time: 7 days (to reach bank account, available for internet payments immediately) Fee: $0 Recieved: €819 exchange rate: (May 14, 2008): 1 USD = 0.646418 EUR Western Union rate (May 14, 2008: 1 USD = 0.63 EUR Actual Fee: $32
Something that I should point out. PayPal Premier. With a Premier account my brother would have had to pay 2.9% + $0.30, but he would have been able to receive the whole $1,300. That would have been something like this:
Amount: $1300 Time: 3 days (to reach bank account, available for internet payments immediately) Fee: $38 (2.9% + $0.30) Recieved: €795 exchange rate: (May 14, 2008): 1 USD = 0.646418 EUR Western Union rate (May 14, 2008): 1 USD = 0.63 EUR Actual Fee: $68
Considering I did not stick around the bank long enough to see how much they would charge in the exchange. I think its fair to say that it would have been more than $8, PayPal wins again. What I ended up doing was just sending him his maximum for the month ($500) to his PayPal account, from mine. Which since it is a personal account, was free minus the exchange fee. As you can see above, their exchange fee is the most reasonable.
If my brother tied his Spanish PayPal account to his Spanish Bank and his US bank, the whole process would take a grand total 7 days more or less, but it would not cost nearly as much. Furthermore, He would be able to access his money as soon as it is in his PayPal balance to pay bills online or anything. You see, some PayPal accounts (Spanish accounts being one of them) allow you to have international banks in their records. For instance, my brother can have his Santander (es) and his Santander (pr/us) both in the same account. It would take 3-5 days for the first transfer (us bank -> paypal) and the same for the second transfer. It was 2 days though, either way in about a week you would have your money. Western Union and Moneygram are making a killing in the money sending business. They charge you for sending the money and then they charge you again for exchanging it. They pretend as if your money really went over there and then they had to do you the favor of giving it to you in the local coin. But that is not what happens. You give them the money, and immediately they know somebody else will have to pay for this. The whole wait period is a gimmick. The fact that people are still paying for it means that people are already waiting to get screwed over in this whole ordeal. PayPal gets it -half- right. With their partnership with Mastercard they should provide other countries with the same Check Card they do here. That way the second the money is available on the PayPal balance my brother can change it into cash. PayPal wins because my brother is keeping a balance, and my brother wins because it did not take too long for him to get the money. I'm sure somebody can come in and charge fewer fees and have it be instant and make up for the fewer fees in the volume of customers they would get. Oh, and, don't get me started on the amount of information the local bank asked me. You would have thought I was Bill Gates singlehandedly funding Al Qaeda or something. I'm exhausted...