The Hidden Side of Remitly's “Free “ Debit Transfers

By Remitbee - Oct 6, 2021

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Why You Should Think Again Before You Send Your Next Money Transfer Through A Debit Card

When sending money to your family and friends back, you have many money transfer service providers to choose from. One of the providers you have probably used or considered in the past is Remitly debit transfers. Remitly readily serves countries in Asia, Africa, Europe and South America.

There are two main reasons why you may have shortlisted Remitly. Firstly, they provide a convenient debit option. Secondly, it’s a simple alternative to traditional transfer methods, such as using your bank account. And it’s supposed to be free. And free feels good.

How Debit Money Transfers Work

Let’s first look at how debit card transfers work. You can use your debit card to transfer money electronically from your account when making a purchase. A debit card also enables you to transfer money directly overseas or add it as a payment method with Remitly or any of the other international money transfer services. So, it’s quite convenient, especially if you don’t have a credit card, or you simply prefer not to use it.

The main advantage of using your debit card to send money internationally is that it is connected directly to your bank account at the time you are sending the money. You don’t have to worry about credit card fees or the non-availability of funds.

You can also send as much money as you wish. You only need to be mindful of the daily spending limit, which is the maximum amount of money you can send or withdraw in a 24-hour period. This amount varies from bank to bank and depends on the type of account you have. You should confirm this information in advance, especially if you are planning to transfer large amounts.

How about the free debit part?

Now, this is where it gets interesting. Remitly has a service called Remitly Debit transfers Express. It’s supposed to offer you money faster transfers for "free,” using your debit card.

Remitly usually would fund these transfers by charging users’ debit cards. Normally when customers use their debit card to fund transfers, they are charged an additional fee that changes depending on the amount being sent and the country concerned. But Remitly tells you that you would not be charged any fees for debit transfers.

Remitly is correct about this claim. They actually don’t charge you a fee, which is a good thing. But where the catch comes in is that they give you a much lower foreign exchange rate.

It might not seem like a big deal when transferring small amounts. You will only be making a very small loss and you don’t have much to worry about. But if you are sending large sums to your family or planning to fund some special projects back home, the difference can be quite substantial.

If you choose to wait to get a better exchange rate, you would be required to wait 3-5 days. And even then, there is no guarantee that the rates will get better in your favour.

When Remitly and similar money transfer companies offer you these debit express transfers for free, you should give it a little more thought before jumping into it. You do make a small gain from the “free’ debit transfer promised by Remitly? But you might lose it all and more from the exchange rate margins at Remitly.

The exchange rate difference also depends on which country you are sending money to. Transfer rates between popular countries and well-known business destinations might be steady. But for countries with high currency fluctuation, you will be getting a much poorer exchange rate.

These are the questions you should be asking when next you are thinking of a money transfer through the Remitly “free’ service using your debit card.

What Other Alternatives Do You Have?

You should shop around for other companies, such as Remitbee offering free debit transfers. Remitbee also has one-day delivery, but it gives you a much better exchange rate. And the best part is that it comes with zero fees. All transfers over $500 are free and anything under has a small fee of only $2.99. There are no hidden charges.

Last word.

Free is always good. But whenever you see a free money transfer offer, you should always take a closer look and consider all the other available options.