Online Money Transfer

The term Online Money Transfer refers to the process of transferring money between two persons or two entities/organizations or a combination thereof, through the Internet.

A large number of financial institutions including Banks and retail Payment Service Providers (PSP) offer online money transfer services to their customers. We will take a broad look at how the online money transfer process at Banks and PSPs works.

Online Money Transfers with Banks

Online Money Transfers through banks require both parties involved to have bank accounts and to some extent an online transfer permission or online money transfer option activated; The remitter should also have the requisite sum in the account to effect the transfer. The money transfer transaction should specify in addition to the amount and the currency of the transfer, the bank account details of the beneficiary.

With the explosion of digital communication channels many banks have started offering their services, including money transfer services, catering to the technological requirements of the Mobile and Tablet devices.

So, customers can now transfer money using not only their PCs or laptops but also their mobiles  and tablets. They can do this by transacting via their bank’s mobile website or by downloading and using special “Apps”. Even customers with basic phones can transfer money through SMSes.

Another important characteristic of money transfer operations through banks is that all such transactions both national and international need to go through a Clearing House.

 

Online Money Transfer with Payment Service Providers

PSPs like Western Union, Xpress Money, PayPal etc. offer an online money transfer service that is more versatile than the online money transfer service offered by their banking counterparts.

Here, it is not mandatory for the beneficiary to have a bank account (although they can choose to receive the funds in their bank account). The beneficiary can receive the funds on their Credit or Debit Card or in cash or in case of PSPs like Xpress Money, can even have the money delivered to their door step.

The remitter too, may not need a bank account; in such cases, the remitter needs to have an account with the PSP through which he can transact online. Like their banking counterparts, PSPs also offer their customers the facility to transact online using their mobiles or tablets.

Tags: online money transfer, online money transfer with with payment service providers, online money transfers with banks