Sending Money Home: Fees, Exchange Rates and Safe Providers

Ways to send money abroad

FCAC lists banks, credit unions, money transfer businesses, cheque cashing businesses and currency exchanges as the kinds of providers you can use. Some money transfer businesses operate inside post offices, grocery stores, pharmacies and convenience stores. You can usually set up a transfer online, by telephone, by email or in person, and pay by cash, cheque, money order, debit card, credit card or prepaid card. The money can be delivered as cash, as a deposit into a bank account, or as a credit to a card ^[1].

What it really costs

A transfer has three costs, and the advertised fee is only one of them ^[1]:

• The fee. It may be very different from one business or financial institution to another. Some charge a flat fee, others charge different fees depending on the amount you send, and fees may differ depending on how you pay ^[1].
• The exchange rate. Some businesses make a profit by charging a higher than usual exchange rate, so ask about the rate and compare it with other providers ^[1].
• Charges at the other end. The person you are sending to may have to pay a fee or tax to collect the money. These are on top of what you paid to send it, and banks' disclosed fees don't include charges in the receiving country ^[1].

Banks and other federally regulated financial institutions in Canada must tell you how much they will charge to send money abroad ^[1]. The practical way to compare is to ask each provider the same question: if I send this amount today, how much exactly will arrive, in the local currency? A low fee with a poor rate can cost more than a higher fee with a better rate.

Questions to ask before you send

• Does the amount your family receives depend on the exchange rate when you pay, or when the recipient collects the money? ^[1]
• How long will it take? FCAC says it can vary from a few minutes to a few days, and that faster options usually cost more ^[1].
• Can the recipient collect the money close to where they live? They may also need to show identification ^[1].
• Is there a discount for repeat business or for larger amounts? ^[1]
• How can I confirm that the transfer was completed and the money was delivered? Always get a receipt and a transaction number ^[1].

Check that the provider is registered

In Canada, a money services business is a business that provides services such as foreign exchange dealing, remitting or transmitting funds, or issuing money orders ^[3]. Money services businesses operating in Canada, and foreign ones that direct services to clients in Canada, must register with FINTRAC before they begin to operate ^[2]. FINTRAC publishes a searchable registry, and it advises you to verify the name, number and status of a business listed there ^[2][4].

Don't pay with a credit card

FCAC warns that using a credit card to send money may be treated as a cash advance. There is no interest-free period for cash advances, and interest is charged right away ^[1][5]. A debit card or a bank transfer from your account is usually the safer way to pay.

Scams aimed at families

In an emergency scam, someone claims to be a family member, a lawyer or a law enforcement official and says you must send money immediately. They use urgency and threats, and may claim there is a “gag order” that stops you from telling anyone ^[6].

• Hang up and contact the family member directly, using a phone number you already have, not one the caller gives you ^[6].
• Don't trust caller ID. Fraudsters use technology to disguise the number they are calling from ^[6].
• The Canadian justice system does not allow someone to be bailed out of jail with cash or cryptocurrency, so a request to pay bail that way is a scam ^[6].
• Be careful about what you share on social media, because fraudsters can use those details to sound convincing ^[6].

If something goes wrong

Federally regulated financial institutions, such as banks, must have a complaint-handling process. Other providers are provincially regulated ^[1]. Keep your receipt and transaction number, and report suspected fraud to the Canadian Anti-Fraud Centre. See How to Spot Rental and Newcomer Scams for where to report.