How Online Money Transfers Work

Online Money Transfer Basics

The main reasons to send money via an online money transfer service are undeniable: Online money transfer is fast, convenient and safe.

Mailed checks can take days to be delivered, and they can be lost in the mail or stolen. If that money is being sent internationally, where it might be needed most, there's also the matter of currency conversion fees, which are generally costlier than a money transfer fee. Online money transfer allows nearly instantaneous delivery -- it takes data only seconds to travel on the Internet -- with no physical complications to virtually anywhere in the world.


Numerous safety measures are in place to ensure that your money goes exactly where it needs to go. Multiple layers of data encryption are used for online money transfers. That way, if by chance the data is stolen or hacked en route to the recipient, it's all coded multiple times so that it's illogical, illegible jibber-jabber. It's money on a screen to you, but once you hit send on a secure money transfer Web site, it goes out into the Internet as coded data, and once it's received by the recipient's bank or service, it's decoded and deposited as currency.

All online banking transactions, including online money transfer services, are processed by the Automated Clearing House (ACH), an independent agency that offers secure financial data transmission. The various services offer other levels of protection, such as confirmation phone calls to both parties (who have to verify private information), confirmation e-mails, and even insurance policies that guarantee your money will be sent and your bank accounts won't be compromised.

OK, so it's safe for you, and for the person that needs money. But how much does it cost to send money online, and where do you go to do it?