Tuesday, 17 June 2008

Online Payments and Transfers

Since globalization is around us, I'm trying to find out if there are low-cost online services that allow reliable, fairly quick, and simple money transfers. I am interested in two ways these can be utilized. First, as a way to transfer funds internationally, eventually performing a currency conversion in the process. And, second, to accept payments internationally in case you are doing online business. The processing should be flexible and accommodate for different ways that suit different people. Meaning that the transfer should be possible from bank accounts and credit/debit cards, and eventually additional ways. Something like PayPal is doing. But, since PayPal has various restrictions if used from certain parts of the world (where I need it sometimes, actually) I decided to look for other solutions and do a comparison of the services.

Some of these services represent your eWallet, meaning they act as an account where you can store funds and use them to pay for different services, just like your plastic card, or to pay anyone.


iKobo uses Visa prepaid card as a way to transfer money. You can send the funds into someone's iKobo account for $5 via bank transfer or add 3% if you're paying from a credit card. The additional one-time cost is the card shipping to the receiving party, in case they do not have an iKobo account.
The funds are then withdrawn from any ATM using the card. There are fees for almost anything, like monthly maintenance fee of US$ 0.99, ATM withdrawal fee of US$ 1.99, etc.


PayPal accounts support one country only. If you are moving countries then an existing account needs to be closed and a new one opened for the new country.
Minimum withdrawal amount is EUR 10 or AUD 15.
Sending money is free. Withdrawing by bank transfer within Australia is $1 for for transfers of up to $150, and free for transfers of $150 or more.
Accepting payments for Personal accounts is free, for Premier/Business accounts it is approximately between 1.1% and 3.4%. Exchanging currencies draws a 2.5% fee on top of the PayPal exchange rate.
Transfer options for some countries include only outgoing credit card transfers.

Amazon (TextPayMe)

TextPayMe used to offer some interesting features. Maybe they still do but the service seems to now be owned by Amazon and limited to United States only. So much for an international transfer.


Fee structure: 1% (up to 0.50 Euro) to send money; free to receive.
They do international money transfer. The fee for upload is free if you use Swift, 1.9% if you use credit card. Withdrawal fee is 1.8 Euros. Withdrawal can be from Moneybookers into a local bank account (for a supported country) or a Visa credit card for 1.8 Euros, or via cheque for 3.5 Euros.
For a currency conversion the fee is 1.75% on top of interbank rate. The payments can be done in over 30 currencies.

XE Trade

XE Trade is a part of XE network. The service offers the currency conversion with the locked rates on selected day and forwards the funds to the destination account. They don't charge fees on deposits because you are responsible for the transfer to them. This means your financial institution's fees apply for sending funds. In some countries, like Australia, this is free for the transfers within the country.
Outgoing wire transfer costs 17 Euros (20 Australian Dollars). Draft withdrawals are free. EFT works only in US and Canada.
Edit 2013-02-23: XE Trade offers free ACH/EFT transfers. The only fee charged is included in the currency rate spread.

Todays' conclusion...

Unfortunately, none of the reviewed services offers satisfactory service. I need the service in the Balkans region and it is not fully supported by any of the providers above. It seems that good old cash and credit cards are still the way to go.

Edit: See http://alensfinance.blogspot.co.at/2013/02/international-money-transfer.html

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