In this article I tell you my experience sending money to Russia using different methods: bank transfer, Western Union, PayPal and TransferWise. You will see how the price differences between one method or another are very noticeable.
Updated May 17, 2020
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0. The different ways of sending money to Russia
On several occasions I have had to send small amounts of money to relatives to Russia or Georgia. Sending money abroad always means paying commissions, and if you do it to countries of the former USSR (Russia, Ukraine, Georgia, Armenia, Azerbaijan, etc.) these commissions are even higher.
Let’s analyze what it costs today to send 1,000 GBP to Russia (the results are the same if you send euros, dollars or Indian rupees), with the recipient receiving the money in rubles, by comparing 3 methods:
- Traditional methods: such as WesternUnion or MoneyGram.
- Online payment services: such as PayPal, WebMoney or Yandex Money.
- P2P money transfer services: like TransferWise.
I have used these three methods to send money to Russia. For comparative purposes, all calculations were made on May 17, 2020.
The first thing I have to say is that for small amounts of money, a bank wire transfer is the worst method, since the fees charged by the banks (from both the issuing bank and the receiving bank in Russia) are usually very high. For this reason, I have stopped using bank transfers for sending money to Russia for many years, since these are very expensive.
1. Traditional methods: WesternUnion or MoneyGram
WesterUnion or MoneyGram are specialized companies in sending money abroad. They have an extensive network of offices, which I have used on different occasions, though they are now offering the money transfer service through their Internet website.
Well, sending 1,000 GBP to Russia through Western Union has a commission of 4.90 GBP if you send it by credit/debit card or by bank transfer, but the main problem is that it applies an exchange rate not too good. This means that if you send 1,000 GBP to Russia today, you would be charged an exchange rate of 86.1439 RUB/GBP, so that the recipient in Russia will receive 86,143.86 rubles.
2. Online payment services: PayPal, WebMoney and Yandex Money
PayPal is a payment method already known by virtually anyone, which allows you to buy in many websites, as well as transferring money between users by email. Other similar methods implemented in Russia are WebMoney and Yandex Money.
PayPal, contrary to what many people think, is not an economic method to send money to Russia (or to countries in which it implies a currency change), mainly due to two reasons:
- Firstly, when it comes to international personal money transactions to Russia, the commission is not free, as PayPal charges a fee of 1.80 GBP if it’s being sent from a bank account, and 4% if it’s sent from a credit card, whether debit or credit. In the case of commercial transactions, commissions are even higher. You can consult the commissions at this link.
- Secondly, when you send pounds to a recipient in Russia, Paypal applies a rather unfavorable exchange rate. Today it applies an exchange rate of 84,7867 RUR/GBP, very far from the real exchange rate of the day.
Thus, if you send 1,000 GBP to a relative or friend of Russia, the commission would be 1.8 GBP (40 GBP if you use your bank card), but your friend or Russian family member would receive in its Paypal account a total of 84,786.80 rubles. Also, keep in mind that if the recipient wants to transfer this money to its Russian bank account, it would have to wait a couple of days to have the money available.
3. P2P Money Transfer Services: TransferWise
Recently, several financial peer to peer (P2P) online services have emerged, offering money transfers with low commissions and that apply the actual exchange rate of the moment. The most popular of all is TransferWise (from the creators of Skype).
This is the method I currently use to send money to Russia because it is cheaper and easier for me.
For example, sending 1,000 GBP to Russia today has a commission of 1.037% (10.37 GBP) but the good thing about TransferWise is that it applies the real exchange rate of the day (88.9560 RUB/GBP). As a result, the recipient in Russia receives 88,033.53 rubles (having discounted already the applied commission, unlike previous methods where commission is paid separately). In addition, TransferWise allows you to make the payment by card without additional costs:
4. In summary
- Western Union: you send 1,000 GBP and the recipient in Russia receives 86,143.86 rubles (in addition, you have to pay a commission of 4.90 GBP).
- PayPal: you send 1,000 GBP, and the recipient in Russia receives 84,786.80 rubles (in addition, you have to pay a commission that varies between 1.8 GBP and 40 GBP).
- TransferWise: you send 1,000 GBP and the recipient in Russia receives 88,033.53 rubles (with the commission of 10.37 GBP already discounted of this amount in rubles, unlike previous methods where commission is paid separately).
All calculations were made on May 17, 2020. As you can see, the price differences are very large between these different methods.
Have you sent money to Russia or to countries of the former USSR? You can tell me your experience below.