Ece Öztürk Doğan
Head of Growth & MarketingAugust 17, 2023
Wondering which is the cheapest way to send money? Learn about sending money locally or internationally, and some of the best options available.
A note: Please kindly note that Cenoa does not provide investment, tax, legal or accounting advice; and this material has been prepared for informational purposes only. You should consult your own advisors before engaging in any transaction. You can find detailed disclaimers on Cenoa’s website.
Transferring money digitally has become part of everyday life for most consumers worldwide — person-to-person payments grew by 4X from 2018 to 2022. And young people especially are using payment transfers; 85% of consumers aged 18 to 29 have used a money transfer service. Let’s explore why and how people are transferring funds to one another and businesses, and how to transfer money while preserving as much of your investment as possible.
Top reasons why people transfer money
People transfer money to one another for many reasons, from major financial decisions to paying a friend back for a delicious brunch. A 2023 MoneyGram report, the State of Remittances, found that the top reasons consumers send money abroad are to support family and friends, help loved ones with unexpected situations, to celebrate, and to help those who have been impacted by world events.
Transfer money abroad to support friends and family
The top reason people send money across borders is to provide financial support to family and friends. When individuals leave their home countries to seek greater financial prosperity — and successfully find consistent work, they want to share with their loved ones, ideally while paying the lowest international transfer fees.
Pay contractors or freelancers
Companies all over the world have found success working with freelancers and contractors in other countries, and have had to find the lowest cost international money transfer
methods to pay them. A LendingTree survey found that school and work related expenses are a top reason to use money transfer services.
Pay for goods and services
Though many businesses take credit cards, some businesses like nail salons, market stands, or small restaurants sometimes only accept cash and money transfers. LendingTree found that the most popular reasons to use peer-to-peer money transfer services are related to goods and services: 33% of survey respondents use transfer services for clothing, 28% for groceries, and 27% for entertainment.
Pay rent, buy property, or pay a mortgage
Rent checks are becoming a thing of the past: many landlords accept bank transfers, wire transfers, or payment through money sending apps. 21% of LendingTree survey respondents use peer-to-peer money transfer apps and websites for living expenses like rent and utilities. And when buying property, bank transfers are often involved, including a down payment and paying a mortgage.
Contribute to investments
Whether they’re based in your home country or abroad, investing involves shifting money from your bank account to an investment platform and watching it grow. Recent research found that more consumers aren’t just using peer-to-peer transfer services to send and receive funds, but they’re keeping money there as an investment.
Pay a friend back for a meal or activity
Whether it’s to cover costs from a camping trip or pay a friend back for getting your dinner, transferring money to friends has gotten much easier since free or low fee money transfer apps came into play. 41% of LendingTree survey respondents transfer money for food and dining.
Pay tuition for university
Many universities require students or parents to transfer money directly to an account linked to the university’s tuition department. 8% of respondents in LendingTree’s survey used peer-to-peer transfer services for school or work.
Support humanitarian organizations based outside their country
8% of MoneyGram survey respondents send money abroad to support humanitarian organizations outside of their home country.
Why banks charge to transfer money
Banks charge different amounts for different types of transfers. Many bank transfers are free, especially when sending money from one account to another within the same bank. Wire transfers take several steps — and an intermediary — to process, so wire transfer fees are meant to cover the costs of these services.
Lowest fee money transfer options and the pros and cons of each
When sending money internationally or to individuals or businesses within your own country, there are a few main options in the peer-to-peer money transfer space.
1. Venmo
Venmo doesn’t charge fees to send or receive personal funds via a Venmo balance, connected bank account, or debit card, but they do charge 3% to send money via credit card.
Transferring money to your bank account or debit card from Venmo takes 48 hours, but to do it instantly costs 1.75% (minimum $0.25, maximum $25).
Venmo is only available in the US.
2. Cash app
For personal money transfers, Cash App doesn’t charge any fees. There are two ways to transfer funds to your bank or debit card: standard, which is free and takes 1-3 days, or instant, with a 0.5% - 1.75% fee (minimum $0.25). On Cash for Business, users aren’t charged fees for instant deposits, but they automatically deduct a 2.75% processing fee on each transaction.
Cash App is available in the US, EU, and the UK, and sending international transfers is free. The exchange rate used is the mid-market exchange rate, and the funds are received in the recipient's home currency.
3. Zelle
Zelledoesn’t charge users for transfers from one bank to another, and lets users send money with just their recipient’s email or US mobile number. Zelle is built into many different banks’ online banking apps.
Though Zelle doesn’t charge fees, some banks can charge fees for transactions made using Zelle, so check with your bank.
Zelle is only available in the US.
4. Bank transfers or wire transfers
Bank transfers typically refer to transfers from one banking institution to another, within the same country. Wire transfers are commonly used to complete international money transfers, but are also sometimes used domestically — the main difference is they use an intermediary to complete the transfer.
Bank or wire transfer fees range widely, from $0 to $50. Talk to your local bank to find out the fees for incoming, outgoing, domestic, and international transfers — and shop around to see if you can find a bank where transfers are free.
5. Cenoa Super Wallet
The Cenoa Super Wallet offers an instant money transfer service that lets users send money internationally, instantly, and for free. It has no setup fees, no monthly fees, no transfer fees, and no withdrawal fees. It’s available in 50+ countries, so you can send funds easily from one country to another.
How can I transfer money without fees? Try Cenoa.
Cenoa is an encrypted, easy-to-use, free way to transfer funds locally or around the world. And if you store your funds in the Cenoa app, you’ll enjoy up to a 5% yield that helps your funds grow steadily. Learn more about Cenoa’s international money transfer service.
