By Renee D. for SpeedyPay.info
Money transfer services have been around for many years but because of fraudulent acts in more recent times (for example people selling non-existent products online and receiving funds by Western Union), many people now question the integrity of companies that offer these services.
Even though some companies should be avoided for one reason or another, there are still a number of viable options for sending and receiving funds via the internet. In this article, we wanted to provide an overview of what money transfer services entail, as well as a few examples of key benefits and red flags that should be heeded.
What are Money Transfers?
While most people have a good idea of what money transfers are, we felt a brief description was necessary. In simple terms, this type of service acts as a “middleman” between one party that sends money online and another party that receives it. Today, virtually everything is done using the internet, to include various types of financial transactions. Because of this, new opportunities have been created that are beneficial but on the other hand, there is potential for risk.
Because of advancements in technology, transfers can now be completed using different types of devices. For example, Western Union transfers initially required an individual to visit a local store or branch in order to complete the appropriate paperwork.
However, money can now be sent and received using a money transfer service via computer or cell phone. Although this makes things easier and more convenient, it also creates unique challenges.
Benefits of Transfer Services
There are actually many reasons that services of this kind are beneficial. Obviously, the benefits of sending and receiving money online would be unique to the individual or organization but overall, these services provide many of the same benefits to include those listed below.
- Services are available to large corporations, small mom and pop shops, and individuals alike.
- Financial transactions can be completed for a variety of reasons such as making a purchase from an overseas company, paying an employee who works in a remote location, and taking care of an emergency in a different geographic area.
- Money transfers are completed much faster than payments made with a check and in fact, most transfers are instantaneous.
- Exposure of personal financial information to include credit card numbers is eliminated, thereby preventing identity theft and financial loss.
- Reputable money transfer services use discretion and secured servers, but also provide a guarantee that information will never be shared or sold.
Potential Risks of Money Transfers
As mentioned, along with benefits of money transfer services are several potential risks of which a person should be aware. Keep in mind that while risks exist for transfers that occur on a national level, the greatest risks involve international transfers. Below we listed some examples of things that could go wrong if a dishonest company were used to send or receive money online.
- Loss Protection – Unfortunately, many transfer services do not provide any type of protection against loss that might occur. Even though actual cash is not being placed in an envelope and mailed, transferring money is really no different in most instances. Scams – Someone requesting money could actually be committing a fraudulent act. Most transactions involve honest parties but with money transfers being so common and easy to complete, new methods of scamming money out of hard- working and honest people have been devised.
- Human Error – Someone working for a transfer services company could incorrectly enter a dollar amount, bank account number, sender/recipient information, or some other piece of vital information, thus creating disaster.
- Poor Security – One of the most common mistakes people make when it comes to using money transfer services is not researching and confirming system security. Even with the most high-tech security measures in place, professional hackers can get hold of personal information although somewhat more difficult. However, if a service is handling financial transactions online but without having a robust security system in place, any funds being sent or received would be at risk, not to mention critical personal data about one or both parties.
- Timing Issues – Most transfers are completed within minutes but a completed transaction could take much longer for systems that run on scheduled batches. A common reason money transfer services are used is to expedite a payment. Therefore, having a transaction that completes past an important deadline would create a serious problem. Now, the same problem could arise if the server on which the transfer company operates were to crash or go down for scheduled maintenance.
- Unexpected Fees – In exchange for completing a money transfer, some type of fee is paid by the sender. The amount of fees can vary dramatically from one company to another and unfortunately, many are “hidden” in carefully worded text. As a result, the individual sending money to another party ends up being charged a significant amount of money.
There are valid reasons for using money transfer services but before using any company, some degree of research should be conducted to determine terms and rates. In addition, the type of security, as well as any policy specific to guarantee should be determined. While this might not eliminate risks altogether, it would certainly help diminish the chance of something going wrong.