Remittance services versus international bank transfers

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Remittance services versus international bank transfers

There are many ways to make international money transfers and payments. From remittance companies, banks and even peer-to-peer transfers, there is a solution for everyone. But how do consumers decide between remittance services and bank transfers?

There are several factors to be taken into account when selecting your desired transfer method. The most common of these being price, speed, exchange rate and convenience. Depending on the priority of the customer, it is difficult to define which service is better than the other.

Remittance ServicesInternational Bank Transfers
PriceUsually a flat fixed fee on SenderUsually a percentage of amount sent and flat fee based on receiving country
SpeedDepending on the company and payout method, it can be as fast as minutes for the money to be receivedTransfer time can take from 24 hours to 5 business days. This duration usually decreases when the transfer is repeated and the bank has sufficient record and information
Exchange RatesUsually competitiveUsually competitive with large volume
ConvenienceAllows money to be transferred to the receiver's bank account. Some companies even have cash pickup points.Mostly allows only the option of money to be transferred to the receiver's account

*factors vary from company to company

Based on the table, it may look like remittance services have the upper hand. Why then do some consumers still prefer using international bank transfers?

Price Remittance fees vs Bank charges

Charging a percentage of the amount being sent works well for smaller amounts only. For example, John is an expatriate who sends US$1000 overseas to his family every month. A remittance service might charge flat fee of US5 of this amount is much lower than 1% of sent amount.


This is considered important only for consumers looking to send money for emergencies. In this case, remittance services are more likely to be faster than banks due to banking processes.

Exchange Rate

This factor is highly dependent on the local cross-border payments landscape. While the common believe is that banks have better rates, remittance companies are known to be relatively competitive. There is no harm in making comparisons  before deciding on which method to use.


Depending on your priority, convenience can mean different things. It might mean being able to send money on the go through an existing bank account straight to your receiver's bank account or allowing your receiver to access the money immediately.  

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