Do you want to transfer money abroad but are worried as you do not have a bank account? Well, don’t fret as there are hundreds and thousands of people like you, who are successfully transferring money abroad, without a bank account.
Not everyone has access to the banking system. Federal Reserve reports that about twenty percent of Americans have no bank account and thus rely on substitute financial services for their monetary needs. In China, there are more than two hundred million unbanked inhabitants.
There could be various reasons as to why people do not have a bank account. It could be because they don’t trust banks or due to their past financial mistakes or are not able to fulfill the minimum balance requirements. Life can be difficult without full access to the banking system. Even with full access to traditional banking, one can still be at a disadvantage due to the digital divide within society. Many people are concerned about the costs related to bank accounts, but the costs of remaining unbanked are even higher.
However, those who do not have a bank account can still transfer money abroad to their families back home or for other personal and business reasons. Bank transfer is not an option for them as they would have to bear unfair exchange rates and higher charges. The truth is that the banking system has not been designed with poor households or low to moderate-income in mind. Despite the high risks that come with the alternative services, most individuals turn to them as they are the only feasible option.
Sending money abroad without a bank account has indeed become easier and more convenient than before. One can rely on currency brokers to send money and can easily track payments from initiation to completion to cash reconciliation. The currency brokers only support bank to bank transfers, so be wary who you pick for the money transfers. Reliable brokers will offer you the most ways to send payments with a global payout infrastructure to any recipient around the world. However, bank fees are much higher and often opaque. Thus, it can be difficult to determine and control the final costs of transferring money from any specific account.
How To Transfer Money Without an Account?
Thankfully, there are some alternative ways to receive money for those without a bank account. They can use high street agents and money transfer apps, but there are both pros and cons of these alternatives.
- High Street, Agents-High Street agents, are offline agents that have been providing traditional financial services for over a hundred years. They operate within their network of branches all around the world and transact money for their customers. While they provide convenient money transfers by cash, sending money abroad can be expensive with them due to the higher fees. Plus, it may take more time for the money to get transferred.
- Money Transfer App – Most people without a bank account prefer using money transfer apps as it is a simple and convenient way to send money. There are plenty of online services that one can use to send money abroad from a smartphone, and it is a lot cheaper too, as those transactions are free of charge. Plus, it is faster, and one can track the money transfer.
Opportunities can surge for traditional and alternative financial institutions as more and more people prefer digital payment options. Cash pickup transfers and mobile money transfers are some other specific services that allow one to send money even if they do not have a bank account. Automated payments can be sent and managed through the web app, and one can view balances and activity and get real-time transaction information with alerts.
Nevertheless, the alternative services are available only in certain countries, and one needs to have an active mobile wallet. You can check if these services are available in your country and find out how the payment system works. For example, Western Union, a popular money transfer service, transfers money seamlessly in more than 200 countries and thousands of locations.
It is indeed difficult to imagine someone who lives without a bank account. After all, banking is considered to be a stable, safe, and right way to manage one’s finances. Any alternative financial services are seen as exploitative in nature. Still, many people go in favor of alternatives that are seen to be riskier.
Alternative financial products
If you do not have a bank account, look for a reliable alternative for payment operations and with simple, transparent pricing. Enquire about the payment procedures, the risk and understand the features before registering or handing over your cash. Ask about the localized and global bank transfers in different countries and in what currencies. The service provider should be honest and transparent in its servicing and pricing.
Whatever the reason for remaining unbanked, one should look for the best alternatives for their financial needs. When using alternative financial products, be sure to understand their services, the fees associated, and the procedures followed. Go for the alternative service once you know what lies ahead for you.
While some of the alternative financial services may seem preferable because of their transparent fee structure and convenience services, the costs can add up to higher expenses with time. Financial Health Network reports that unbanked and underbanked Americans spent almost two hundred billion in fees and interest when using alternative services. There are both direct and indirect expenses for the customers who remain unbanked.
With the payment methods fast-evolving and shifting, it has become all the more important to reach the unbanked. Companies and employers are now shifting to digitized payments, and more customers for banks mean more revenue produced for the bank. The emerging middle class in the developing countries around the world needs to be educated on why to open a traditional bank account.
Banks and financial institutions around the world must connect with the banked or unbanked consumers who have different needs and are looking for more options for their financial solutions.
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