5 Effective ways to send money to Africa
New options of sending money globally, particularly in Africa where remittances play a crucial role in the economy and livelihoods of many, are constantly emerging. While these options may seem challenging to people without experience, with some practice, the process can easily and efficiently be completed. Here are 5 effective ways of sending money to Africa, upon discovering tips for finding the best exchange rates.
Bank or Wire Transfers: A traditional method for sending money to Africa is through bank or wire transfers. In a wire transfer, the sender pays for the transaction, sends the money to their bank which acts as a middleman, and then the bank sends the money through a SWIFT system to the receiver's bank, down to the receiver. In a bank transfer system, money is transferred directly from the sender’s account to the receiver’s account without a middleman. Although commonly used, these options can be expensive due to high fees and exchange rates, but are suitable for large transactions because of the added layer of security.
Sending via Mobile money transfer services: Mobile money is a way to transfer money using a mobile phone, it uses a mobile network operator (MNO) to facilitate the transfer of funds. The sender signs up for mobile money services, initiate a transfer by sending a text message or using a mobile app, the MNO verifies the sender's identity, deducts the funds from the account and sends a confirmation message to both sender and receiver. The recipient can then use the money to make purchases, pay bills, or withdraw cash from a mobile money agent. It's becoming popular in African countries like Kenya, Ghana and other developing regions because it enables people who may not have access to traditional banking services to transfer money easily and securely.
Prepaid Debit cards: Sending money with a debit card involves signing up for a card with a financial service provider that allows international transactions, loading funds onto the card, providing the recipient with the card number and security information, the recipient can then use the card to make payments, purchases or withdraw cash. Some cards may have international transaction fees, and the recipient can check the balance and monitor transactions made with the card. It can be a convenient option as it can be loaded with a specific amount and protect remittances from currency fluctuations and inflation, but it's important to check the fees associated with the card.
Electronic money orders: A money order is a type of payment instrument, similar to a check, that can be used to send money to another person. The sender goes to a bank, post office or other financial institution to purchase a money order, fills it out with the recipient's name and address, pays for it with cash or check, sends it to the recipient via mail. The recipient takes it to a bank, post office or other financial institution that cashes money orders, presents a valid ID and signs the money order to cash it. Money orders are considered secure as they can only be cashed by the designated recipient, are legally binding and traceable. They may have some fees associated with them and it's important to check with the financial institution or post office about their policies.
Non-bank money transfer operators: Non-bank money transfer operators (MTOs) are independent companies that allow individuals to send money to other individuals or businesses in different locations. The sender signs up with the MTO at a physical location, website or mobile app, provides the recipient's information, pays for the transfer with cash, credit card or other accepted payment methods, the MTO verifies the sender's identity, deducts the funds, sends a confirmation message and transfers the money to the recipient's account or can be picked up at a location. Non-bank MTOs often offer competitive exchange rates and lower fees compared to traditional bank wire transfers, and have a wide network of locations, but it's important to research the company's reputation, fees and regulations before using one as some MTOs may have hidden fees or be subject to less stringent regulations.
As earlier stated, remittances play a crucial role in the economy and livelihoods of many people in Africa, and being able to send money quickly, securely, and affordably is paramount for both the sender and the receiver. Not all money transfer options are created equal, knowing the options and comparing their pros and cons can help you make an informed decision about which method is best for your needs, and keep you updated with the new options and tools that can be used to facilitate the process of sending money.
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