Why You Should Send Money Home Only Through Legitimate Money Transfers

Posted by Nadia Winget on June 25th, 2024

Foreign currency money transfer methods are used to send money to Sri Lanka from another country, typically involving the conversion of one currency into another. These transfers are used for various purposes, including paying for goods and services, remittances, business transactions, tuition fees, and more. Here are some common methods:

1. Bank Transfers (Wire Transfers)

Usage: Sending large sums of money securely between bank accounts across different countries.

Process: Involves the use of SWIFT or IBAN codes for international transactions.

Pros: Secure and widely accepted.

Cons: Can be expensive with high fees and poor exchange rates; processing times can be several days.

2. Online Money Transfer Services

Examples: Digital banking apps such as TransferWise (now Wise), PayPal, Revolut, Payoneer, OFX.

Usage: Using the best online banking in Sri Lanka is convenient for personal remittances and small business payments.

Process: Transfers are initiated online or through apps, often offering competitive exchange rates and lower fees.

Pros: Fast, user-friendly, transparent fee structures.

Cons: Limits on transfer amounts; might not be available in all countries.

3. Foreign Exchange Brokers

Usage: Often used by businesses or individuals needing to transfer large sums and requiring better exchange rates.

Process: Brokers provide better rates and personalised services.

Pros: Competitive exchange rates, tailored services.

Cons: Typically require higher minimum transfer amounts.

4. Money Transfer Operators (MTOs)

Examples: Western Union, MoneyGram, Ria Money Transfer.

Usage: Popular for personal remittances, especially to regions with less banking infrastructure.

Process: Transfers can be sent online, via phone, or at agent locations, with funds available for pick-up at various global locations.

Pros: Fast transfers, widespread availability.

Cons: High fees, less favourable exchange rates.

5. Cryptocurrency Transfers

Usage: Emerging method for international transfers, particularly for tech-savvy users and those needing to avoid traditional banking fees.

Process: Involves sending cryptocurrency (like Bitcoin) to a recipient who can convert it to local currency.

Pros: Low fees, fast, borderless.

Cons: Volatility in cryptocurrency value, regulatory concerns, and limited acceptance.

6. International Bank Drafts and Checks

Usage: Traditional method for sending money abroad, often for business transactions.

Process: A check or draft is issued in a foreign currency and mailed to the recipient.

Pros: Secure.

Cons: Slow, can take weeks to clear, fees can be high.

7. Mobile Money Transfers

Examples: M-Pesa, WorldRemit.

Usage: Common in regions with high mobile phone usage and limited banking services.

Process: Transfers are made using mobile networks, with funds accessible via mobile wallets.

Pros: Fast, convenient, especially in developing countries.

Cons: Limited to countries and regions with mobile money infrastructure.

Use Cases:

Personal Remittances: Sending money home to family members for use as daily expenses or investment and savings with banks offering the good savings and fixed deposit rates in Sri Lanka.

Business Payments: Paying suppliers, employees, or contractors in other countries.

E-commerce: Paying for international goods and services.

Tuition Fees: Paying for education abroad.

Investment: Transferring money for investment purposes.

Each method has its own advantages and disadvantages, and the best choice depends on factors such as the amount being transferred, the speed required, the costs involved, and the convenience for both sender and receiver.

Why is it important to always end money home through legitimate money transfer methods?

The importance of sending money home from overseas through legitimate means cannot be stressed enough, with the many scams and fraudulent activities going on these days. Here are some reasons why you should always choose reputed money transfer methods:

1. Security and Safety

• Protection from Fraud: Legitimate money transfer services use robust security measures to protect your funds and personal information from fraud and theft.
• Secure Transactions: These services comply with regulatory requirements and use encryption and other security protocols to ensure that your money reaches the intended recipient safely.

2. Regulatory Compliance

• Anti-Money Laundering (AML): Legitimate services adhere to AML laws, ensuring that your money is not used for illegal activities.
• Know Your Customer (KYC): These services require identification and verification of users, which helps prevent money laundering and terrorist financing.

3. Reliability and Transparency

• Guaranteed Delivery: Reputable services have established networks and processes to ensure that your money is delivered on time.
• Transparent Fees: Legitimate providers offer clear information about fees and exchange rates, avoiding hidden charges that can erode the value of your transfer.

4. Legal Protection

• Consumer Rights: Using regulated services gives you legal recourse in case something goes wrong. You can lodge complaints with regulatory bodies if the service fails to deliver as promised.
• Dispute Resolution: Established services often have customer support and dispute resolution mechanisms in place to address any issues that may arise.

5. Economic Impact

• Support for Local Economies: Legitimate transfers contribute to the formal economy, supporting financial institutions and economic development in recipient countries.
• Aid and Development: Money sent through legitimate channels can be tracked and used to support development programs and social services in recipient communities.

6. Exchange Rate Fairness

• Better Rates: Legitimate transfer services often offer competitive exchange rates compared to informal or black-market channels.
• Fair Conversion: Using formal channels ensures that the recipient gets the maximum possible amount in local currency, as opposed to being shortchanged by unscrupulous operators.

7. Peace of Mind

• Tracking and Confirmation: Reputable services provide tracking information and confirmation of receipt, giving both sender and recipient peace of mind.
• Customer Support: Access to reliable customer service in case of issues or questions about the transfer.

Risks of Using Illegitimate Methods

• Loss of Funds: There is a high risk of losing your money if you use unregulated or illegal channels.
• Legal Consequences: You could face legal penalties for using or facilitating illegal money transfers.
• Support for Criminal Activities: Unregulated methods may inadvertently support criminal activities, including money laundering and terrorism.

By using legitimate money transfer methods, you ensure the safety, legality, and reliability of your transactions, ultimately protecting both your own interests and those of your recipients.