MoneyGram vs Western Union: What to Use?

Updated on Feb 27, 2020 at 7:28 pm UTC by Osaemezu Ogwu · 11 min read
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Photo: Unsplash
Photo: Unsplash

We took the two money-moving giant companies – Western Union and MoneyGram to compare them against each other with regards to certain factors that will guide you when you’re thinking of making a choice.

In the world of international money transfers, a lot of people make use of the services of either MoneyGram or Western Union. The two companies are specialists when it comes to moving funds across borders and offering their services to people across all the five continents. With regard to the volumes of foreign exchange handled by these companies, both are recognized as heavyweights in the market.

How you go about performing a transfer with Western Union is very similar to the process with MoneyGram. In a simple way, we can summarize them both in one shot: You go to their website, input the sum you’re transferring, where you wish to send it to and you’ll be shown how much the exchange will cost you.

The two services also give you the option to visit an office, call or make use of their app on your phone to initiate a transfer. After successfully pulling that off, your cash will be converted and delivered to the bank account you provided or for cash pickup at locations worldwide.

Western Union Overview

Western Union is the bigger of the two companies. It is widely recognized all everywhere across the globe, courtesy of its one-time monopoly and dominance of the telegraph business. Although sending telegrams was discontinued in 2006, Western Union, by then, had moved on to new ventures. As it stands, the company has approximately 500,000 locations in more than 200 nations around the universe. It makes it possible for customers to send funds by phone, via the Western Union website, or in person.

Western Union fees can be high or low, based on a number of factors which include the payment form used, how fast the fund is delivered, whether it is reimbursed in cash or wired to a bank, the location it is sent from as well as the location it is delivered. With transfers across borders, the exchange rate attaches another element of uncertainty to the cost, though.

With regards to domestic transfers, if you provide cash at a Western Union agent and the receiver picks it up in the same cash form, the cost is usually around $5.00. But if the funds are withdrawn from your online bank account, the cost would be about $11.00 while using your debit or credit card will raise the cost to $49.99. Transfers between banks are only $0.99 but making use of a debit or credit card to send money into the beneficiary’s bank account will cost $20.00.

Meanwhile, the international transfer fees of Western Union can vary widely. For instance, if you are in the USA and want to transfer $500 to someone in Mexico. If you provide cash at a Western Union agent or get the money withdrawn from your online bank account and the beneficiary picks it up in cash, you will spend $5.00 on fees.

But, using a debit or credit card, the same transaction will cost you $7.00. For a bank transfer, it will cost $2.99 if a credit or debit card is utilized to transfer money into a bank account. If you decide to send it online or via the mobile app, the fees would be between $4.00 to $7.00. However, the fees for this same transaction to Ireland would be around $5.00 to $42.00, and $10.00 to $75.00 if you are sending it to China.

​MoneyGram Overview

With the need to send money increasing as more people continue to travel abroad, fund transfer companies are increasing every day and set up an intense competition between one another. As it stands, Western Union sits at the summit of the rankings but it is experiencing an intense rivalry from the fast-growing MoneyGram.

MoneyGram is the next in line when we rate the top money-transfer companies out there in the world at the moment. It is the biggest rival Western Union has got right now, with its domestic transfer charges closely matching those of its competitors. They tend to be a little higher, though.

The fees range around $11.00 for customers who are funding from an online bank account and $49.99 for those paying via a debit or credit card for sending between $50 to $900 within the USA, as well as 2% for amounts over $900.

MoneyGram established its reputation on international fund transfers. It’s got over 25,000 payment locations across the African continent alone. Notwithstanding, its rates for international money transfers do not seem to be much simpler than those of its competitor company. With MoneyGram, you can send up to $500 to Mexico, making use of a credit or debit card for a fee of $9.99, but the same transfer will cost $31.00 if the fund is picked up in Ireland and $49.99 if it is sent to China.

Comparisons

Western Union and MoneyGram both offer similar services and have offerings that look alike. However, when you want to make a choice, you will probably like to go for the one that best suits your needs and desires. Factors such as differences in fees, speed, accuracy, reach, etc will likely influence your decision. That is why it is good to take a look at the two companies, compare their services before making a choice.

As said earlier, Western Union and MoneyGram are both highly reputed in the international financial sector. As a matter of fact, it is difficult to separate the two companies as they both do a great job of moving money from one place to the other across several areas and destinations across the world. As such, picking one over the other will be based solely on your interest. If you are willing to make a choice, you should consider the following factors as we compare the firms against each other:

Fees

Western Union: for Western Union, the cost of your transfer will be determined by the country you are sending it to, the mode of payment you used as well as the transfer method employed. Transferring the money to an overseas bank account and paying through an electronic bank transfer is the most cost-effective way when using the service.

In contrast, sending money to cash pick-up centers and paying with a debit or credit card will cost more. For instance, even though most Western Union fees start at $5, they can rise as high as $45 if you pay by credit or debit card for cash pickup in some countries. If you’re transferring money to high-traffic countries like India and Mexico, you could be offered fee-free transfer options by some agents.

MoneyGram: Like Western Union, when transferring money via MoneyGram, the destination country, the payment method used, and the type of transfer employed can affect the cost of the transfer. Moreover, payments made through an electronic bank transfer often attract fewer charges than the ones made through debit or credit cards. In the same vein, you will pay more if you send the fund to a cash pick-up center than a bank account.

In a nutshell, fees vary based on how much money you’re sending, how you’re transferring it and the destination you’re forwarding it to. It isn’t easy to discover upfront how much you’ll pay if you don’t initiate a transfer. For instance, to transfer $1,000 to China from a bank account, you’ll be charged a fee of $8 but you’ll pay $48 to pay for that same transaction through credit or debit card, Also, to transfer $1,000 for cash pickup in the Philippines will cost $4.99 from a bank account and $10 if it goes by a credit or debit card.

Exchange Rates

Western Union: Depending on your destination country, a normal exchange rate at Western Union could be about 6% above the mid-market rate. If you are transferring a huge amount overseas, it implies that hundreds of dollars will move straight into Western Union’s treasure chest. The transfer method employed can also influence the exchange rate you get. In certain destinations, funds sent to bank accounts get better rates than the ones that are forwarded to cash pick-up centers.

MoneyGram: MoneyGram also distorts exchange rates for a profit. Based on the destination country of your transfer, the exchange rate could be placed at 5% or more above the mid-market rate. Just like Western Union, it means that you could have hundreds of your dollars diverted to MoneyGram’s pockets if you’re making a big transfer. You’ll be given a clear indication of the exact exchange rate by the company before you finalize your transfer, though.

Countries

Western Union and MoneyGram are both available in many countries across all the various continents we have on the planet right now. You can make use of their services from a number of countries, and both companies enable you to send funds to every part of the world.

Western Union is the largest money transfer network in the world, with over 500,000 agent locations in 200 countries and over 100,000 ATM stations and kiosks across all the four corners of the globe. MoneyGram isn’t far behind as it also operates in more than 200 countries globally and supports a wide range of international currencies. To check the supported countries, head over to their respective websites and conduct a search.

Ease Of Use

In terms of ease, while using their services, both companies do a good job. You only need to fill a simple application form to register to either of the two, after which the company you apply with confirms your details. You can access their websites in multiple languages and they both offer several convenient methods for their customers such as payments via debit cards, electronic bank transfers, through their websites and also send money to cash pick up centers for receivers who do not possess a bank account. You can also initiate transfers through cash, over the phone, and in person.

Security

When it comes to security, there is very little that sets these two companies apart. All data transmitted via these companies’ websites remain protected owing to high levels of encryption. Your money will remain in a segregated account until your transfer goes through.

In the United States, Western Union is licensed by various state bodies including the Arizona Department of Financial Institutions, the West Virginia Division of Banking, the New York Department of Financial Services, and the Florida Office of Financial Regulation. In the UK, the company offers its online service via the Western Union International Bank GmbH, which got its license from the Financial Markets Authority, Austria.

On the other hand, the operations of MoneyGram are overseen by state regulatory bodies in the United States such as the Banking Department of the State of New York, California Department of Business Oversight, the Georgia Department of Banking and Finance and the Arizona Department of Financial Institutions.

Regular Overseas Payments

With these companies making it possible for people to move money around every part of the world quickly, they’ve drawn a lot of customers to their sides within the past few years. Given the services they offer and the ease they provide, it is normal that people who send or receive international payments on a regular basis will desire to use their services to set up recurring transactions.

However, it is obvious that neither MoneyGram nor Western Union enables you to set up regular overseas transfers. People who want to schedule regular transfers will need to look elsewhere and find other companies that offer such services.

Conclusion

Western Union and MoneyGram are both highly-reputed and offer exceptional services. That’s why they’ve been at the top of the game for several years. They also have certain advantages that are specific to each other which customers need to take note of and relate them with their needs before deciding on which one to make use of.

While Western Union and MoneyGram are similar with regards to their offerings, you may get a better exchange rate with MoneyGram, especially if your transaction involves large figures. That could help you to save hundreds of dollars and probably thousands depending on how large your transactions are and how often you transfer money.

Moreover, if you consider it important that your friends or family should be able to pick up your money in cash, Western Union’s 500,000 agent locations all over the globe outpace MoneyGram’s 350,000.

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