Money transfers can broadly be divided into three types of service; consumer to consumer transfers, consumer to business and business to business. Money transfers are used by consumers for many reasons, with the most common being to make payments for goods and services and to send money to family and friends living overseas.
Electronic money transfers are nothing new; the banking sector has been using them for decades. SWIFT (the Society for Worldwide Interbank Financial Telecommunication) was established in 1973 and is the most widely used service in banking today. It originally used the telecoms network, but today it has its own secure SWIFTNet network. Banks primarily use this service for transferring money between international accounts.
For consumer to consumer money transfers there are many online options available. Many retail banks provide this service; for example, Citibank have launched Popmoney®, which enables their customers to “Pay Other People” direct from their account. JP Morgan provides a similar service, known as Chase Online Bill Pay, which is a free service that allows customers to pay anyone.
Independent online money transfer services are becoming more popular every day.
Advantages of online money transfers
Online money transfers provide a fast and secure way to send money anywhere in the world. By using smartphone technology individuals are now able to transfer money earned in one country to their family overseas, without even having to visit their bank.
PayPal is a very popular service, especially as it is now free for personal transfers. Payments incur a fee from PayPal, but personal money transfers are free of charge. If a currency exchange is required there is still a fee.
The biggest advantage of services such as PayPal is that international borders are not an obstacle. With traditional money transfers, delays almost always occur during the money transfer. PayPal manages the payment within their servers and as long as the sender has sufficient funds in their account the money will be delivered.
Online transfers allow money to be sent from a debit or credit card. More traditional money transfer agents, such as Western Union, provide an over-the-counter service where cash can be sent to another account.
How fast are online money transfers?
Most money transfer services offer same day and standard services, which take anywhere from a few days to a week. The fastest services incur higher fees.
Consumer demand for fast transfers has increased competition in the market. Today, one of the leading sites for security and speed is Transfast.com; the site contains detailed information concerning online money transfer delivery times. For new customers, transfers can take a few days, but established customers can make payments from a credit card or debit card within a day.
The future of online money technology
The future of online money technology is mobile; smartphones will become the most common way for transferring money between accounts.
In the very near future many more methods of transferring money using an email address or a cellphone number will become available. As services such as Google Wallet and PayPal Mobile Payments become more mainstream, online payments will be faster and easier to access than ever before.