There are a variety of ways to give money to someone you care about. You have the option of giving cash, a payment card or check in person, or you can mail a check and payment card by mail. Or you can use an electronic person to person money transfer system which allows you to send money directly from your bank accounts to another person.
An electronic money transfer system eliminates the need to visit an ATM or bank, pay bills or coins, locate a mailbox, postage stamp, or postal office or even interact face-to-face with your recipient. You can instead authorize the transaction online or via a mobile device. You may receive the funds within minutes or in a few days.
Michael Hakimi (owner and certified financial planner at Black Dog Financial Planning, Mount Pleasant, South Carolina) says that these services are easy to use and user-friendly. They help people avoid carrying cash around, using paper checks or risking losing cash by not sending them money.
The Best Money Transfer Methods
Anyone can use some money transfer systems if they have a bank account or a debit card or credit card. Others systems are only available to customers of specific banks or credit unions.
These five systems can be used online and via a mobile app. Two of these systems can be used in-person at brick-and mortar locations.
Zelle can also be used online through the Zelle app, or via participating banks' online banking portals. Zelle has partnered with most of the nation's top banks including Chase, Citibank, Bank of America and Wells Fargo. You can send money directly from your bank account to the recipient by providing their email address or mobile number.
PayPal allows you to send, request and collect money online. Online shopping is possible with your PayPal debit, credit, prepaid, or credit card. PayPal has both personal and business accounts.
Venmo allows you to send money person-toperson and make purchases in online shops that accept Venmo.
Hakimi states that Venmo is a very similar social network interface and is easy to use. It allows you to connect with your friends and create a profile. Venmo is used by many of our friends to split the cost of utilities, rent, and restaurant bills.
PayPal owns Venmo.
- Western Union. Western Union lets you send money online using the company's app, or in person at any Western Union agent. You can either deposit funds directly to the recipient's bank account, or pick them up at a Western Union agent.
Walmart2Walmart allows you to send money online using the company's mobile application or any Walmart store across the U.S. including Puerto Rico. You can also pick up the money at a Walmart location. Walmart also offers Walmart2World, MoneyGram, which allow you to send money internationally online via an app or in a Walmart store.
Benefits of transferring money
Venmo allows you to send money from your bank account to another person using your debit card or bank account.
There are disadvantages to transferring money
Although electronic money transfer systems can be used easily, you will need to have basic tech skills in order to set up transactions and create an account. Transfers to international destinations may incur currency exchange fees.
Online money transfer carries risks
There are also risks associated with electronic money transfers.
Hakimi states that there will always be cybersecurity risk with online banking products. "A malicious person could hack into your account to send money to themselves."
If you have the option, use a pin to protect your peer-to–peer payment account.
Another tip: Double-check the name, email address and phone number of your recipient. It's unlikely you can reverse a transaction if you send money to the wrong recipient.