Sending money abroad can be straightforward—or surprisingly costly. If you need to remit funds to Chile, understanding your options and the hidden costs involved is critical. This article compares traditional bank-to-bank transfers with modern online platforms, outlining fees, exchange rates, speed, accessibility, and security. By the end, you’ll know which method best suits your needs, budget, and the preferences of your recipient in Chile.
Why Choosing the Right Transfer Method Matters
When you send money internationally, fees and exchange rate markups erode the amount your recipient actually receives. Traditional banks often charge high flat fees, apply poor exchange rates, and add correspondent-bank fees. In contrast, online services typically offer more transparent pricing, competitive mid-market exchange rates, and faster delivery. Selecting the wrong provider can cost you dozens—or even hundreds—of dollars per transfer, especially if you send money regularly.
Comparing Fee Structures
Bank Transfers
- Flat Fees: Most banks levy a fixed fee per international transfer, often ranging from $25 to $45 USD.
- Exchange Rate Markup: Banks typically apply a 1.5–3% markup above the interbank rate, turning every dollar into fewer Chilean pesos.
- Correspondent Fees: Transfers routed through intermediary banks may incur additional $10–$30 charges, deducted from the transfer amount without clear disclosure.
These costs add up quickly. For example, sending $1,000 USD via a major bank could cost $30 in upfront fees plus $20 in intermediary charges and a 2% exchange rate markup—reducing your recipient’s payout by more than $70 before the shipment even begins.
Online Platforms
Modern money-transfer services streamline costs and improve transparency:
- Wise (formerly TransferWise)
- Fee: Around $8 USD for bank-funded transfers
- Exchange Rate: True mid-market rate with zero markup
- No correspondent fees
- Global66
- Fee: Flat $6–$10 USD per transfer
- Exchange Rate: Mid-market, zero markup
- No hidden costs; free peer-to-peer transfers within the network
- Remitly
- Fee: Promotional rates as low as $4.99 USD on first transfer; subsequent fees vary
- Exchange Rate: Mid-market for promotions; ~0.5% markup afterward
- No intermediary fees
- MoneyGram
- Fee: $0–$5 USD depending on corridor and funding method
- Exchange Rate: Approximately 0.8–1.2% markup
- No correspondent fees
By using platforms that employ the real market rate and charge transparent fees, you can save 1–2% on each transfer compared to banks. On a $1,000 transfer, that equates to $10–$20 saved—plus lower upfront charges.
Speed and Convenience
Banks
Traditional banks process international wires through SWIFT, which can take 1–5 business days. Cut-off times, weekends, and national holidays may further delay delivery. Initiating a transfer often requires logging into online banking with SWIFT/BIC codes or visiting a local branch. Tracking information is limited, and corrections due to errors can trigger additional fees.
Online Platforms
Digital providers prioritize speed and ease:
- Wise:
- 60% of transfers arrive instantly, 95% within 24 hours
- Mobile and web apps let you lock in rates and track delivery end to end
- Global66:
- Most transfers complete within 1–2 business days, with some instant payout options via partner banks
- Simple account setup and referral bonuses for first-time users
- Remitly:
- Economy service: 3–5 business days
- Express service: minutes, with higher fees
- MoneyGram:
- Cash pickups in minutes at over 430 locations across Chile
- Bank deposits typically within 1 business day
The ability to choose delivery speed based on cost and urgency means you can balance budget against timing. For non-urgent needs, economy options save money; for emergencies, express services deliver within minutes.
Accessibility for Recipients
Bank Networks
Recipients must have a bank account with a Chilean financial institution and provide full account details, including IBAN or CLABE, SWIFT code, and branch information. In rural areas or among unbanked populations, access to banking services may be limited, forcing cash pickups—or requiring trips to branches, often far from home.
Online Platforms
Digital services offer multiple payout methods:
- Bank Deposit: Direct to recipient’s Chilean bank account.
- Cash Pickup: Over-the-counter collection at partner locations (e.g., Global66 kiosks, MoneyGram agents).
- Mobile Wallets: Delivery via compatible mobile payment apps (where available).
- Account-to-Account within Network: Instant transfers between users of the same platform (e.g., Wise-to-Wise, Global66-to-Global66).
This flexibility ensures even recipients without bank accounts can access funds through cash-pickup points or mobile wallets.
Security and Compliance
Financial security is paramount when moving money across borders:
- Banks operate under strict regulation by central banks and financial authorities, offering insured accounts and formal compliance checks.
- Licensed Money-Transfer Operators (MTOs) must adhere to international Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Providers like Wise, Remitly, and MoneyGram publish transparent compliance information and maintain full audit trails.
Both routes are generally secure, but online platforms often provide clearer tracking, proactive notifications, and dedicated customer support channels for international transfers.
Cost-Saving Strategies
Regardless of method, you can reduce total transfer costs:
- Compare Total Received Amount: Look beyond transfer fees. Calculate the net Chilean pesos delivered after exchange-rate markups and hidden charges.
- Batch Transfers: Consolidate smaller payments into a single larger transfer to dilute fixed fees over a greater sum.
- Time Your Transfer: Monitor currency fluctuations and send when the USD/CLP rate is favorable. Some platforms allow you to set rate alerts.
- Use Local Currency Funding: If you hold funds in a local USD account or digital wallet, use that balance to avoid credit-card or debit-card transaction fees.
- Leverage Promotions: Take advantage of first-time user deals, referral bonuses, or temporary fee waivers.
When Banks Make Sense
While online platforms are ideal for personal remittances under $5,000, banks remain relevant for:
- High-Value Corporate Payments: Transfers exceeding $10,000 where small percentage savings matter less.
- Vendor and Invoice Settlement: Businesses with established SWIFT relationships needing formal payment trails.
- Regulatory Reporting: Situations requiring documentation for tax authorities or specific banking compliance obligations.
- Recipient Preference: Beneficiaries who insist on direct bank credits rather than cash pickups or digital wallets.
Choosing the Right Option
- For personal remittances, monthly family support, or urgent emergencies, online platforms offer the best combination of low cost, speed, and flexibility.
- For large corporate transactions or formal business payments, traditional bank transfers provide the established infrastructure and documentation businesses often need—albeit at a higher cost.
Remitting money to Chile no longer means settling for steep bank fees and sluggish processing. By comparing total costs—including transfer fees, exchange rate markups, and intermediary charges—you can find the most economical solution. Digital platforms like Wise and Global66 deliver superior transparency and speed, making them the go-to choice for most personal transfers. Meanwhile, banks continue to serve businesses and high-value clients who require SWIFT reliability and extensive compliance documentation.
Whether you prioritize cost savings or institutional backing, understanding the nuances of each method will help you make informed decisions and ensure your recipients receive every peso you intend.