Money Transfer via MTO or Bank?

Whether it is sending money back home to support your family, sending money to your kin or buying a property abroad, there are several reasons to make an international money transfer.

Let’s first understand how MTOs and banks ensure watertight security in order to perform a safe international money transfer. Both the MTOs and banks use technology software companies to ensure successful operations. These money transfer software providers empower banks and MTOs with top-notch technology. For money transfer software to mobile apps they offer comprehensive solutions to meet the need. Remittance software provider offer several built-in features that are integral to run money transfer operations successfully.

Now let’s talk about how we can perform a safe transfer of funds. You must need the right resource for money to reach the intended destination. To make an international money transfer, there are several options to choose from; money transfer operators (MTOs) and banks are the most commonly used channels. Between the two options, is there a specific one that works better? Read on to understand the different money transfer options to help pick the best one in your situation.



International Money Transfer via MTOs

Money transfer operators are not all the same. Therefore, the processes and requirements vary on the following factors: receiving country, amount of money and payment methods. However, international money transfer through money transfer operators is pretty straight forward. Essentially, it takes the following simple steps.

1. Create an Account

First, you must find a trusted money transfer service provider. Second, sign up with them and set up an account which usually takes only a few minutes. Some details you may be expected to share are related to your name, address and phone number. After providing your information, the third step is to verify your email address to activate the account.

2. Add Your Beneficiary

Once your profile is ready, now you may add a new recipient by entering their name,address and other relevant information such as bank account number.

3. Pay for the Transfer

Once a transaction is created, pay for the transfer from the payment method options offered by your money transfer operator. You may pay with your credit card, debit card or a direct transfer from your bank. Note that paying for the transfer from your bank account will be the least expensive option, while payment by credit card will likely trigger fees.

4. Track the Transaction

Once you complete a transaction, you will be provided an anticipated delivery time along with the reference number to check the status of your transaction through the money transfer app or website. This way you can track the status of your international money transfer.



Advantages of Sending Money via Money Transfer Operators

1. No Bank Account Required

MTOs don’t require a bank account to do an international money transfer. Contrastingly, while sending money through a bank one must have an existing account with the bank.

2. Better Exchange Rates & Lowest Cost

MTOs has less operational costs than those of the banks, that is why they can afford to offer better exchange rates. If you want your beneficiary to receive almost what you are sending, consider using MTOs. Note that bank policies vary on many factors and can attract additional costs. However, most money transfer operators offer a flat transfer rate or a minimal service fee.

3. Fast & Reliable

Another advantage of MTOs is fast money transfer. Most money transfer operators are faster than banks; direct transfers can take as little as 24 hours to get to the recipients. Note that if the transfer is an emergency, you can even initiate same-day pickup.



International Money Transfer via Banks

When determining an international money transfer with your bank, you must have a wire enabled account with them and in some cases a specific currency account as well. Moreover, a few other factors like the receiver county and the sending amount may vary whether or not you can make an international money transfer through your bank. Note that if your bank does not have a pre-existing working relationship with the recipient’s bank, you cannot make a direct transfer, and an intermediary bank will be required. However, several factors must be considered when determining an international money transfer via bank.

1. Wire Enabled Account Required

Some accounts are not authorized to make an international money transfer. You must have a wire enabled account with your bank to make an international money transfer. Moreover, on your account the sending amount limitation is another factor that can hold a transaction before processing. Consider keeping that in mind.

2. High Cost of Money Transfer

Bank money transfer rates are usually higher than those of MTOs. Banks charge some fees for international money transfers including other additional charges such as the handling fee, service fee and the cost of foreign exchange conversion.

3. Prolong Delivery Time

Making international money transfers through banks can be slow depending on several factors. For instance; KYC processes and other security protocols may take longer than usual. The banks usually have a cut off time at 6pm, after which any transaction will be processed the next day; consequently, delaying the money transfer process. Moreover, holidays and weekends can also interfere with funds processing and delivery. Note that to transfer money through a bank, you must consider the delays and plan accordingly.

4. Safest Money Transfer Option

Banks are the custodians of consumer’s deposits and money holding in checking/savings accounts. Most banks are insured and backed by the government regulatory laws and hence are more secure than those of the MTOs.


Bottom Line:

There’s no one-size-fits-all approach. MTOs are great if you want convenience, speed and looking to save money. However, money transfer operators are great if you are sending a limited amount of money frequently. They offer their services on multiple digital platforms, just to create convenience for their customers.

Note that when you find a reliable source to send money internationally; still compare service fees and exchange rates periodically to ensure you are getting the best deal. On the contrary, there are several factors to consider when determining an international money transfer with a bank. If you have an international wire enabled account with your bank then a bank transfer is not complicated. However, while sending money via bank you should keep in mind the high transfer cost and the duration it will take for the recipient to get the money. Note that, if you are looking to send a very large sum of money then bank could be the safest option to go for.



Written by
H. A. Tepha

Thank you for reading!


This publication is not intended to cover every aspect of the topics with which it deals. Seek professional advice if you need any financial assistance. This publication is provided for general information purposes only.