When sending money internationally, select the suitable method that suits you and your recipients. Some people prefer direct transfer of funds into their bank account, and others prefer to have cash in their hands. This article will dispense more information on cash pickup and bank deposit transfers.
Difference Between Cash Pickup and Bank Deposit
A cash pickup is a form of international transfer whereby the recipient retrieves their funds in cash at a physical storefront instead of electronically into a bank account. This option is excellent, especially when the recipient doesn’t own a bank account and needs cash promptly.
A bank transfer is an electronic payment that authorizes sending money from your bank account to the recipient’s bank account worldwide. No physical cash is involved.
There are different ways to send money to the Philippines. They include:
- Cash pickup
- Bank transfer
- Mobile wallet
- Mobile load
Cash Pickup or Bank Transfer?
You need to consider vital points when weighing which method is convenient for your money transfer.
- Some currency exchange providers do not accept cash. Whereas you can transfer money to bank accounts worldwide, only a few offer cash pickups. Your options will be limited, especially if you’d love to fund your transfer using cash while organizing cash collection.
- Consider whether the recipient can collect cash in person before you go for a cash pickup. If it’s impossible, you can opt for a bank transfer, and everything will fall into place in a few minutes with less effort from both parties.
- Cash remittance happens instantly. It can take longer with bank deposits unless you choose the right currency exchange provider to deliver the next day. As a sender, you can organize a cash transfer, and your recipient may be able to collect it after a few minutes.
According to the Federal Deposit Insurance Corporation (2013), data collected showed that approximately 20% of US households had a bank account but opted for other alternatives.
How Cash Pickup Works
First, choose cash pickup as your delivery method for sending a money transfer. The process generally involves picking the appropriate options on the website of the money transfer service, which pays out the cash to the recipient on behalf of the sender.
The person sending pays a stipulated fee every time they send money for cash pickup. They also settle an exchange rate margin and the transaction fee if a currency exchange is involved.
After selecting your recipient’s cash pickup location:
- Enter their names and finish the transfer.
- Ensure the details entered match the ones on their identification document.
- Share with your recipient the transfer details.
- Lastly, the transfer status will read, ‘ready for pickup.’
Your recipient can visit the selected pickup store with their valid identification document and the reference number for the transfer and collect their cash.
Pros of Cash Pickup
- Pretty quick since they don’t involve multiple bank accounts in their transfers.
- Cash pickup gives the convenience of having cash, excluding the extra steps of withdrawing or exchanging the money for the local currency.
- No dependency on payment cards
- No online payment fraud
- Some providers will allow you to bring cash for your transfer, so you don’t need a bank account. It will be convenient, especially if you’re in a country where you don’t have a local bank account yet you want to make a quick transfer with the cash at hand.
Cons of Cash Pickup
- Cash pickups come with a higher transfer fee than bank deposits, and you may only sometimes be aware of all the charges involved afterward.
- Extra costs may arise from the exchange rates. Some of the cash pickup providers come up with rates often higher than what other currency providers have. So, before you make a transfer, shop around to compare the rates of the available service providers and choose the most favorable one.
- It may be unsafe to send vast amounts of money depending on where you’re sending from. The recipient may be at risk if they pick up large amounts of cash, particularly in areas commonly known for theft or pickpocketing. Therefore, cash pickup may not be the best option for enormous amounts of money.
Pros of Bank Deposit Transfers
- Bank transfer is a flexible and convenient means of transferring funds from one bank account to another.
- It charges low exchange rates compared to cash pickups.
- Since it involves the transfer of funds electronically, you can transfer funds online without engaging in paperwork.
Cons of Bank Deposits
- Limit in money transfer. You must transfer money within limits set by the bank; hence, if you’re sending a considerable amount, this will not be the best option for you.
Both cash pickups and bank transfers are quick, easy, and secure ways of sending money to others in other countries. They both have a reasonably similar initiation process; therefore, to choose the suitable method, you need to consider when you’re sending, when your recipient needs it, and how your recipient would prefer their money.