Article summary
Money makes the world go round, but finances are becoming increasingly digital. When everything’s online, those who use cash can feel out of the loop. Sometimes it can feel difficult to move your money where it matters most if don’t have an active bank account. Yet more than 5.4 percent, roughly 7.1 million households, in the US are classified as unbanked. That means they have no savings account, checking account, or bank.
In this article, we’ll look at how you can reach your loved ones, support friends, and transfer important payments to someone without a bank account.
In this article
- Online money transfer for cash pickup
- Make a money order
- Send money to a digital wallet
- How to choose the right method
- FAQs and guides
Online money transfer for cash pickup
Whether you’re sending money to family down the road or loved ones on the other side of the world, money transfer companies can help you move your money quickly to where it’s needed most. They’re convenient, often offer a range of payment and receipt options, and sometimes offer other incentives. Online money transfer companies often work as intermediaries, which means there are a few things to consider.
Methods of payment and receipt
Online money transfer services, such as Western Union, offer many ways to pay for and receiver transfers. Depending on your region, these can include bank transfer, debit or credit card payment and, for those without a dedicated bank account, cash in-person. Likewise, receivers can obtain their funds through a variety of similar methods, including to their mobile wallet or in cash.
Speed of transfer
Depending on the type of transfer, funds could be available for your receiver in minutes1. Cash transfers aren’t only suitable for those without a bank account but are also often the quickest way to move money. Your receiver will have to visit a physical location to pick up the money. At Western Union, we offer a location finder to make this easy.
Transfer Fees
While online money transfer services are convenient, quick, and flexible, they often charge transfer fees as part of their service.
With Western Union, we provide a free price estimator to give you transparent breakdowns on transfer fees1, exchange rates, and delivery times so you can compare, and know what you’re sending.
Make a money order
When moving money by mail, money orders are used as a safer alternative to sending cash or personal checks. Money orders are purchasable from stores like Walmart, the Post Office, certain banks, and remittance companies. Here’s a few things you should know about money orders.
Costs and sending amounts
Money orders aren’t free, though they are generally affordable. Money order fees are usually relative to your sending amount, and the type of money order (such as domestic). You may also be more limited in the amount you can send, with the highest sum capped at $1,000 in a single order in the US.
Delivery time
Money orders need to go through the postal service, so are limited in how quickly they can arrive. You won’t be able to ship one to arrive the same day, though most orders should arrive in a few days, depending on if you make the postal cut-off and there’s no holidays. However, even after delivery time is needed to clear the funds on the receiver’s end.
Reach
International money orders are accepted in many countries worldwide and can be exchanged into local currency in most of them. However, there may be exceptions, so you want to check this information before you commit.
Send money to a digital wallet
Digital wallets are a convenient way to put your money in the hands of loved ones. Digital wallets store a users’ payment details, passwords, and allow the user to make transactions, even using wireless payment technologies. Payments can be made with nothing more than a linked mobile number. They’ve seen an increase in popularity due to their versatility and convenience. Many can also be used without a bank account.
Access
Digital wallets are a helpful way for those who are unbanked to gain access to digital payments, easy remittance, and participate more completely in the growing digital financial systems. Certain countries, however, may not have access to certain digital wallet platforms. Remittance companies may be restricted to sending money to digital wallet providers who are partners.
Growing popularity
Digital wallets, especially since the pandemic, have boomed in popularity, making up more than 25% of point-of-sale spending in 2020. The more users a digital wallet has, the easier it becomes to move money around without a bank account.
Variety
32% of mobile wallet users, on average, use three or more digital wallets. This is important because, while choice is good, using a wallet unbanked relies on having others on the same platform. Without an account you can usually only transfer funds between the same digital wallet. However, that doesn’t stop you receiving funds.
How to choose the right method
Choosing how to send money to someone without a bank account is going to depend on different things.
How much you need to send
Depending on how much you wish to send, certain methods may be better than others. For example, a money transfer service can send larger amounts on average in one transaction than a money order can.
How fast your recipient needs it
Speed is also a consideration: money orders can take a few days and rely on post, as well as the receiver to claim it, whereas wallet-to-wallet transfers can be done nearly instantly. Likewise, cash transfers from money transfer services can be available for purchase immediately but require the receiver to pick them up in person.
Where you’re sending to
Depending on the country your receiver is in, you may not be able to use the method you want. It’s always important to check this, especially before purchasing a money order. Most companies have this information available, so you never have to guess.
