If you want to send money to a relative or friend, transferring to his or her bank account is the simplest means. From a recent FDIC survey of unbanked and underbanked households, though, about 6.5% of U.S. households fell with the former. In a literal sense, this means some 8.4 million households don’t have anyone with a checking or savings account. Considering you might have a friend/s in this category, we’re going to show you how to send money to someone without a bank account.
While there are various ways you can use to transfer funds to someone with no bank account, we’re going to categorize all in two groups. First on our list will be by use of the latest, contemporary technology that we assume you are already using in other areas.
1. Use of Money Transfer App
Well, a couple of decades back, rotary dial telephones were reviewed as the modern means of communication at the time. Although they were still able to facilitate smooth communications, the latest mobile technology is far much efficient and convenient. From your smartphone, you can communicate with someone and also easily send money using money transfer apps that necessarily don’t need a bank account.
At the moment, these apps are very many, with all functioning online. A good example is WorldRemit, which has been offering international remittance services since 2010. Other money transfers apps you can go for include:
Similar Post: How to Transfer Money From One Bank Account to Another
When we speak of online money transfers, Paypal is one of the best platforms you can go with. The online service provider allows you to send money to people using only their email address and phone number. Also, Paypal allows you to send funds in more than 20 currencies.
To enjoy the best from PayPal, both of you (sender and receiver) need to have a PayPal account, which of course, is free to open. Sending funds from one PayPal account to another is usually free. For your recipient without a bank account, there are three different ways he can use to cash in the sent funds. He can either request a paper check, transfer to his mobile wallet, or use a PayPal debit Mastercard. For the card, it’s just like a regular debit card to make withdrawals with at ATM or to pay for purchases.
This is another platform that allows you to send money to your relatives or friends online. You can either send the money from your (loaded) Venmo account or a linked checking account or credit card. It’s almost like PayPal, only that it’s, ideally for use with a network of friends or people who trust each other.
When sending money, there’s no fee applied when using your venom balance, bank account, or debit card. When using credit card payments, though, there is a 3% fee charged.
As for the one receiving the money, he also must have a Venmo account. Once the money gets to his account, he can transfer it to a prepaid debit card, so long the card is registered in his name. BlueBird® by American Express is one of the best-prepaid cards to use with Venmo as it doesn’t even require a bank account to use.
Square Cash App is another modern method you can use to send money to someone without a bank account. Your recipient needs to have the Cash App Account too to receive the funds. The recipient can then use a Square Cash Prepaid Visa debit card or other prepaid debit cards to get the money. A 1.5% fee is applied for convenience of money transfer to the card but if the recipient will wait 1-3 business days, no charge applies.
Summary Features of Money Transfer App
To begin with, the majority of these money transfer apps usually function with a smartphone, tablet, and computer. This allows you to send funds just like you do a text message to your friend or family member. Considering we even have free government cellphones nowadays, the use of money transfer apps is by far very convenient. The services of every provider, nonetheless, vary with the country of the sender and receiver.
- It’s faster and in some cases cheaper than the other means.
- The service is more convenient as you don’t need to leave the comfort of your home or wait in the long queues.
- Cuts inherent risks of cash handling (like loss or fraud) since you can easily track transaction records
- Facilitate access of services to the people in geographically inaccessible locales
- Works only with modern phones
- There’s the risk of getting conned through fake SMS messages and scams.
2. Use of Money Orders and Wire services
As of now, money orders and wire services are old-school means to transfer funds to people without a bank account. With the money orders, you give the funds upfront and fill out an order that is endorsed to a specific recipient. Most financial institutions do offer money orders but you can get them from convenience stores and money transfer companies.
Wire transfer, on the other hand, is almost like money order but which you now use electronically. The service is even more convenient as you can send a larger amount of funds and faster than a money order. When it comes to the fees, though, wire transfers do charge a bit higher for the convenience.
The following are the various forms of Money orders and Wire Services that you can use as a U.S. resident. I hope you got how to send money to someone without a bank account using Wire Service.
U.S. Postal Service Money Order:
The method of money transfer is more like a prepaid check that is made out to a specific recipient. It’s very simple to use from any local U.S. post office, even though there’s a maximum limit of up to $1000. The fee charged at the post office while transacting with a money order usually depends on the money you’re sending. It is, however, less than $2 for a local and at around $0.50 for a money order issued on a military facility.
In case you lose or damage your money order, the U.S. post office replaces it for you at a fee of $6.15. So, it’s really important to be very careful when preparing yours.
Walmart Money Order
In case you feel uncomfortable with the $1000 limit of the U.S. post office, you can opt for the Walmart money order. The service allows you to send a larger amount of funds and at a maximum fee of around $0.9. Once you have purchased and prepared the money order, you then, send it to your recipient by mail- just like with the U.S. post office. The one receiving the money then cash the money order at a Walmart store or check cashing point within his location.
Unlike with the U.S. Postal money order, though, Walmart does have a check cashing fee as well.
MoneyGram Wire Transfer
MoneyGram is one of the oldest money transfer companies that you can go with when sending money to someone with no bank account. The company has been in operations since 1940, whereby it worked offline. Though it has started offering online services, MoneyGram still does work offline in its 350, 000 retail locations spread in 200 countries.
With MoneyGram, you can either send money in cash or by credit card, debit card, or direct transfer from the bank. The recipients then, collect their money in cash at a MoneyGram point or have it deposited to their mobile wallet (if subscribed to one). The fees of using MoneyGram usually vary by where (location) and how (cash/ online banking) you’re making the payment.
Western Union Money Order/ Wire Transfer
Historically, Western Union began in 1851, whereby it dealt with the exchange of telegrams. As for the money transfer services, the company began in 1871, which later went on becoming its primary business.
Western Union has two different means that you can use to send money to someone with no bank account. In one, you can purchase a Western Union Money Order from any of its over 500, 000 agent points in 200 countries. The fees involved vary by location and the replacement fee for a damaged/ lost money order is $15 (if you have receipt) or $30 (without receipt). Once you have finished preparing the purchased money order, you need to mail to the recipient, who will be charged a small check-cashing fee.
If you wish to send large funds, Western Union allows you to transfer up to $5, 000 online. The fees involved in this method, nonetheless, can be higher or lower as it depends on aspects like the method of payment, transaction completion time (minute or days), and how the receiver will get the money.
**You can use this Chart to calculate the fees and transfer speed that you feel favorable**
Summary Features of Money Orders and Wire services
- You can send or receive money without the need of a bank account
- There are numerous walk-in branches where you can send or receive your money.
- It necessarily doesn’t require internet service
- Some providers involve high fees and exchange rates
- It (money orders) can be time-consuming to travel to the agent location, wait in a queue, and fill up the paperwork
To be honest, the economy is not really smooth like we’d have hoped several decades ago. Millions of people around the globe, including from the superpowers, have not been able to open bank accounts. Yes, there are some who can’t open due to their distrust of the banks but the majority don’t have enough money to keep in an account.
Nonetheless, we have shared with you tips on how to send money to someone without a bank account. So, all you got to do is agree with your friend or relative on which will be effective on both ends.