How Does Western Union Work?

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Western Union provides a means of moving money from person to person and place to place for people who may not have options in the traditional financial world. As one of the leading money transfer companies, it has a significant amount of market share, allowing it to dictate to customers on things like transfer fees and terms. With this in mind, it is an often expensive option that can still be helpful for people who need to transfer money in a hurry. While it has limited use from a commercial standpoint, it is an viable tool for personal use. With this in mind, it pays to investigate how Western Union truly works.

Explaining domestic money transfers
The most popular way to use Western Union is for domestic money transfers. This means that if a parent wants to get money to their child in a hurry but they can’t use a bank transfer for some reason, they can visit a Western Union location and send the money. Those locations are typically located within grocery stores and cash advance shops. Savvy customers can also go online. Fees may be higher when using a debit card over the Internet, though.

How it works is simple. You go into the location, write down the name and location of the person you want to send money to and choose how much you want to send. Western Union will then assess a fee. That fee can be as much as 10% if you’re sending a smaller amount of money. The more you send, the higher the fee will be. It will get progressively smaller as a percentage, though.

Once you give Western Union the money and its fee, the clerk will provide you with a control number. You will then have to give the number to the person who will receive the cash on the other end. They can then take the number and their identification card to a separate Western Union location. The agents there will pay out the money transfer, giving your friend or loved one the cash amount you sent. This can all happen within a matter of minutes if you select the “Money in Minutes” option at the Western Union location.

Sending money overseas with Western Union
Many people use Western Union to make international money transfers. It can be quicker than doing an international bank wire, and you won’t have to deal with bankers to make it happen. The process is much the same. Western Union does apply a bit more scrutiny to these transfers, however, as they are required under federal law to take measures that ensure their customers are not using the service for fraud or money laundering.

With the international transfers, you’ll pay a lower fee because Western Union also makes money on the currency exchange. For instance, if you wanted to sent $500 to Nicaragua, you’d likely only pay around $10 to do so. It can be an affordable way for people working in the United States to send money back home to relatives who don’t have access to a bank.