A Comparison of the Costs to Send Money Internationally from a US Bank Account

Adam Rust

It is not easy to compare how much it costs to send money internationally. While it is reasonably straightforward to understand the transaction fee, you need to account for the exchange rate utilized by your service provider.

If you are an international bank, you can send money through large FX channels that provide a highly competitive rate. Unfortunately, If you are a consumer, you will always receive less for your money. However, the amount can vary, both by how the money is sourced and by what exchange rate the provider applies. Some providers will apply a different cost structure depending as well on where the money is picked up.

For this analysis, I have looked at how much it costs if you send money from a bank account using routing and account numbers.

Most of the largest banks in the United States now offer the Zelle service. However, Zelle will not let you send money internationally. .

Western Union and MoneyGram are the big players in this space. They have offices everywhere. That matters most when you are sending money to somewhere unusual. Thus, a consumer has fewer options to send money to Pakistan or Ghana but more to popular destinations. The large providers have business relationships everywhere. The smaller services may limit their networks to Latin American and the developed countries in Asia.

PayPal partners with Xoom.

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Cost to Send Money to Mexico from US bank account

Comparing The Cost to Send Money Internationally

According to the World Bank, a typical Mexican immigrant sends an average of $4,178 back home each year. The Mexican diaspora sends remits more than any other nationality. China is second, followed by India, the Philippines, and Vietnam.  Mexico leads in terms of aggregate amount, but each of the countries sends more on a per-immigrant basis.

The World Bank’s research infers an average remit of $348 per month.

To estimate the cost to send $348 from a bank account, I have subtracted the fee from the amount send and then applied the given provider’s exchange rate.

This list shows each service’s exchange rate on February 18, 2019. On international currency markets, USD: MXN traded at 19.25 pesos for each US dollar.

• By PayPal/Xoom: 18.73 pesos per dollar. The recipient would receive 6,518 pesos. I have included the $4.99 transaction fee. The real cost is $9.76.

• Waleteros to Waleteros: The recipient will receive 6,699 pesos, working from the assumption that the recipient uses his VISA card to withdraw cash at a VISA ATM. In that process, the exchange rate is applied only once the money moves through VISA. VISA’s exchange rate today is 19.208.

• Western Union: 19.067 pesos per dollar. After the $2.99 fee, the recipient will receive 6,685 pesos. The real cost is $6.46

MoneyGram: 18.887 pesos per dollar (fee included): The recipient will receive 6,497 pesos. The real fee is $10.66

• MoneyGram at Wal-Mart: The recipient will receive 6,579.7 pesos. The real fee is $6.53

You will save money if you and your recipient use a Waleteros card. The next-best option is to use Wal-Mart. However, it isn't just the money that makes Waleteros a special value. Because you can send money from inside of an app on your phone, you save time.

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Adam Rust has worked to defend consumers against harmful financial practices since 2005. He has written extensively about overdraft fees, payday lending, credit insurance, student loans, prepaid debit cards, high-cost installment loans, and subprime mortgage lending. The New York Times interviewed him when it reported on the CFPB's rulemaking on prepaid debit cards; subsequently, his research paper framed the debate on consumer protections.

He serves on the Board of the US Faster Payments Council. He is Director of Research at Reinvestment Partners in Durham, North Carolina. He is the author of BankTalk. He is the author of "This is My Home: Challenges and Opportunities of Manufactured Housing" and has testified to Congress on how to redress some of the problems with manufactured housing. See more on his LinkedIn profile.