9 Money Transfer Alternatives to Western Union

October 16. 2017. 8 mins read

In today’s increasingly globalized world, the need to transfer funds across borders while incurring minimal fees is becoming a requirement for most businesses and people. Historically, a money transfer was conducted using a service like Western Union (NYSE:WU) which is rife with fees. Even if you just try to move currencies between two banks, you’ll see how bad the fees can get. First, you’ll pay a transfer fee, then you’ll have your money converted using some ridiculous exchange rate. When you call your bank and complain, John in Mumbai will tell you they use “spot rates”. Of course, you’re sitting there looking at a Bloomberg terminal and you can easily see that what you are being quoted is nowhere even close to a spot rate. Even Paypal is guilty of this, though they do tell you that “this rate includes our currency conversion spread”. Here’s the rate we get for the Canadian dollar (CAD) eh:

Then we log into our trusty Interactive Brokers account to see where spot rates are actually trading at the exact same time:

As you can see, the only way to properly convert currencies is to open an account with Interactive Brokers and do it yourself. The alternative, of course, is to pay the difference between PayPal’s quoted exchange rate for CAD and Interactive Brokers’s spot rate plus a fee on top of that. A company called Western Union (NYSE:WU) has managed to create a $9 billion business out of collecting such fees, but now a whole slew of money transfer fintech startups are looking to get a piece of the action. Here are 9 of them.


Click for company websiteFounded in 2010, London startup WorldRemit has taken in $147.66 million in 7 rounds of funding to build a money transfer service that lets customers in 50 countries send money to people in 140+ different countries with four receiving options – Mobile Money, Bank Transfer, Cash Pickup, and Mobile Airtime Top-up. The free app can be downloaded from both iOS and Android platforms where their “low fees and exchange rates are shown upfront“. Really? How nice of them. Here’s what we were quoted to send our Canadian MBA a benjamin to buy fries and gravy with:

Just about $4 in fees hurts, but at least the exchange rate is more in line with what we are expecting.

Update 06/03/2019: WorldRemit has raised $175 million in Series D funding to help users send money to contacts in emerging markets. This brings the company’s total funding to $407.7 million to date.


Click for company websiteFounded in 2010, TransferWise is another London-based payments startup that has taken in $116.37 million in 6 rounds of funding from investors that include Andreessen Horowitz and Richard Branson. The company aims to provide seamless money transfers internationally while only charging 1% of the converted amount with a conversion rate following real-time mid-market exchange rates. We tested this out and it worked so well we could kiss someone, anyone, everyone over at TransferWise:

Well done people. You actually used spot rates and you charged a reasonable fee. You should also be commended for your transparency, the simplicity of your business model, and the reasonable fees. Winners, all of you.


Click for company websiteFounded in 2011, Seattle based startup Remitly has taken in $100 million in 8 rounds of funding from investors like Jeff Bezos of Amazon, Paul Allen of Microsoft, and the Draper Fisher Jurvetson lot. Their mobile payments service allows for person-to-person international money transfers from the US, Canada, and the UK to 10 different countries. We decided to send one of our Mexican MBAs 100 bones to spend on tacos and tequila:

A few things to note here. First of all, the normal exchange rate (not the introductory one) is not even close to spot (18.95). On their homepage, they make it a point to show you how their rate is better than Western Union, which only goes to show you how bad things used to be before fintech stepped into the picture. The platform also has a $3.99 fee which is waived if you pay using your bank account, but it will take about 3 business days. You can also have the fee waived if you send more than $1,000 but using a credit card incurs an additional 3% fee. That is total rubbish. The best thing about using these services is the credit card points and a 3% fee would cancel out the points benefits. Still, Remitly continues to expand into developing markets and they’re providing alternatives for people with no bank accounts to collect their money from, like Wal-Mart in Mexico where you can pick up your money and spend it all at the same time.  That’s another thing to like about our Walmart investment.

Update 07/10/2019: Remitly has raised $135 million in Series E funding to expand its remittance business and develop a new wave of services. This brings the company’s total funding to $420 million to date.


Click for company websiteFounded in 2012, London startup Azimo has taken in $46.59 million in 5 rounds of funding including a more recent $15-million investment from Rakuten, the “Amazon of Japan”, for the company’s Asian expansion. Azimo offers international money transfers from 22 European countries to over 195 countries, supporting over 60 currencies with the ability to send money to any bank account, 300,000 cash pick-up locations and across all mobile wallets. The money transfer service fee can be as low as $1.18 depending on the country combination and the methods of transfer (below numbers in GBP):

Perhaps the most exciting addition is the new functionality that allows users to send, request and receive cash internationally by using a mobile phone number. The sender can now simply choose a phone contact recipient who will receive an SMS text message with a download link to the app to be able to claim their money. Seems like a clever way to increase adoption.

Boom Financial

Founded in 2008, Silicon Valley startup Boom Financial has taken in $33.7 million in 3 rounds of funding to develop “the world’s first cross border banking service” that allows anyone with a cell phone to send, receive and transact money anywhere in the world using a reloadable Boom account. With a $25 annual membership fee, money can be sent or received anywhere anytime without any fee or amount restrictions per transaction. You can use the Boom Debit Card for withdrawals or via the “Boom agent network” for remote areas that allows withdrawals directly via a text message. We’d love to tell you a whole lot more about them but their website has been down for the past 6 hours and our MBAs wait for no one.


Click for company website

Founded in 2012, Chicago startup Pangea has taken in $20.4 million in funding to “revolutionize the global money transfer industry” and it comes with a “100% money-back guarantee“. We would certainly hope so, and if you do decide to use their services for transferring money you will see a similar situation to Remitly:

Hardly seems like a good deal with an exchange rate that’s definitely not spot (spot is around 18.95 right now) and a higher than normal fee, but with more than 12,000 pickup locations across Mexico, it seems like people are using the service. You can send money from 15 U.S. states to all the popular Latin countries where people might send money like Colombia, Mexico, Dominican Republic. They also support some Asian countries where you will likely find yourself doing business like the Philippines, China, and India.


Click for company websiteFounded in 1999, Maryland startup Viamericas is a private company that raised $6 million in a single round of funding to also serve Latin America with a money transfer offering that covers 51,000 bank and nonbank payout locations across urban and remote communities of Latin America, China, India, and the Philippines. Like Western Union, they have an entire network that is used to transfer money around which means lots of overhead which probably means high fees. Viamericas also offers a whole slew of additional financial services like bill payments, mobile top-up, and check cashing services. They allow API access to their platform which is kind of like “payments-as-a-service” where you can access their entire network with your own applications. This is kind of like how our next company operates.

Currency Cloud

Click for company websiteFounded in 2012, Currency Cloud, a London startup has taken in $59.42 million in 5 rounds of funding by which $24.42 million was made just March of this year. Currency Cloud is a global payment platform that seeks to provide business with frictionless money transfer around the world by allowing developers to build applications or products using their payment and currency conversion APIs. This is referred to as “white labeling” and allows for other companies to attach their brand to the platform and make it look like their own. Entry-level fees start at 0.25% along with a payment fee that starts at 35 cents depending on the chosen method of payment and country combination.

Update 01/27/2020: CurrencyCloud has raised $80 million in Series E funding to continue expanding the availability of their money-transfer APIs throughout Asia. This brings the company’s total funding to $160.2 million to date.   


Click for company websiteFounded in 2013, Irish startup Circle has taken in $136 million in 4 rounds of funding from investors that include Goldman Sachs and China’s Internet giant Baidu. As a consumer finance company, Circle not only offers free, instant and global digital money transfers but also seeks to “transform the world economy” by offering more secure, simple and low-cost solutions that make payments a social thing, complete with emojis. Check out these two tools:

If you’re familiar with how popular the ubiquitous chat platform WeChat has become in China for payments, then that’s probably not far from where Circle wants to be – except without any borders. The Circle platform doesn’t charge any fee or markup as it utilizes blockchain technology enabling users to send payments between U.S. dollars, British pounds or euros simply through mobile phones. As of 2016, Circle has already processed over $1 billion in transactions in 29 countries across Europe. Of course, digging a little deeper we see that they’re also one of the world’s largest crypto asset market makers and they topped $2 billion in crypto asset trading in August.


It’s at this point that we could start going down the path where we look at payment providers like Abra or BitPesa that are using blockchain or cryptocurrencies like bitcoin to do cross-border payment transfers, but these companies bring on a whole new level of complexity to the transactions. Not only do you have multiple conversions taking place (i.e. USD to Bitcoin to MXN) but there are also security implications. When you have ICOs losing millions of dollars from a single theft and nobody batting an eyelid, startups that are using blockchain for transactions need to be heavily scrutinized. Stay tuned for an article that explores the blockchain-payments space more.

While shorting has always been a high-risk endeavor, one play for investors here might be to short Western Union (NYSE:WU) which needs to seriously reinvent itself in the face of all this competition. The 5-year revenue trend for WU isn’t looking so hot:

We’re not big fans of shorting because the market has more irrationality than we have money to throw at it, but at least we now know of a money transfer company that uses actual spot rates and that’s good enough for us.


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