How to transfer money to someone without a bank account

Mar 22, 2021

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Looking to send money to somebody without a bank account but unsure which option might be best?

Take a look at our in-depth guide to getting the job done quickly, cheaply, and securely.

Sending money to people who don't own a bank account ("unbanked") or to people with sparse access to banking services ("underbanked") can seem like a difficult process indeed. However, while these services may appear hard to come by, there are indeed many ways to get the job done cheaply and easily:

Money transfers to people without bank accounts remains a necessity for large numbers of people across the globe. According to the World Bank's Global Findex database, some 1.7 billion adults around the world were unbanked in 2017, constituting nearly a quarter (22%) of the world's population at the time.

If you wish to send to somebody in this group, your options may be more limited (and sometimes more expensive) than they'd be if you were sending to somebody with a fully-fledged online banking account, for example. That being said, however, there are still many good options to choose from when sending money to someone without a bank account:

Option 1: Transfer To a Cash Pickup Location

One of the fastest, simplest, and cheapest ways of sending money to somebody without a bank account is using a money transfer service to send money to be collected at a cash pickup location.

Depending on where you and/or your recipient are living in the world, you'll likely have access to a solid scope of choice with regards to being able to collect cash from a convenience store in a nearby city, given that many providers boast large networks of global partners.

While you could opt to use a traditional currency exchange provider such as MoneyGram or Western Union to get the job done, our analyses have shown that these companies are often (but not always) notably more expensive than newer fintech companies that also offer cash pickup services, such as WorldRemit, Remitly, and Xoom.

To find the best provider to suit your needs when sending money abroad for cash pickup, be sure to search out our comparison engine before you transfer, and select the "Transfer to a cash pickup location" tab on the results page.

What We Like About Cash Pickups

• Typically no fees for the receiver;
• A widely accessible option used across the world;
• Money can be tracked and traced;
• Safe and secure, with a valid photo ID and a reference number needed in order to pick up cash.

What We Dislike About Cash Pickups

• Typically more expensive for the sender than online transfers;
• Can be inaccessible, especially amid Covid-19 related restrictions or in very remote and rural locations.

Option 2: Use a Money Order

Another popular and secure option you have for sending money to someone without a bank account might be to send them a money order.

Money orders — prepaid printed certificates received in the mail that can be swapped for cash at a physical location — are used primarily in countries such as the US, Canada, India, and Australia, where they've proven a durable and well-established transfer method for decades. However, their use has declined over the last 20 years, with the number of money orders sent to Mexico, for example, plummeting drastically since 2009.

In the US, money order certificates can be bought easily at a wide number of physical locations which are authorized by either the US Postal Service (USPS), MoneyGram, or Western Union.

While certainly an option for sending money internationally from the US, especially to countries in Latin America, we'd recommend you make sure that money orders can indeed be received in your destination country, as their global scope can be quite limited. If you live in the US, take a look at the USPS's list of countries to which money orders can be sent.

What We Like About Money Orders

• A safe and secure method of sending cash;
• No expiration date;
• Senders and receivers aren't required to show a lot of personal information;
• Very cheap when sent domestically;
• Money can be tracked and traced.

What We Dislike About Money Orders

• Used in only a small group of countries;
• Fewer locations offer money order services than cash pickup services;
• High fees when sent internationally.

Option 3: Send via a Mobile Wallet

Rather than using a bank account, there are people out there who choose to handle some or all of their financial services using a mobile wallet instead.

While often a lot more limited than a traditional bank account, mobile wallets such as PayPal and Venmo work by storing currency on a secure account that’s accessed using a mobile phone, offering a simple and effective way for individuals to manage money.

Encompassing a very broad variety of solutions, mobile wallets typically function as more of a payment method than a bank account, and are used as an alternative to cash or cards when making a purchase. PayPal (which is more of a digital wallet than a mobile wallet in that it's not directly linked to a mobile number) is one of the most famous solutions, but others include Venmo (which cannot be used for transfers outside of the US), as well as a large variety of solutions that are popular in the developing world such as bKash in Bangladesh, Paytm in India, and MTN Mobile Money, M-Pesa, and Orange Money in Africa.

What We Like About Money Wallets

• Very fast payments;
• High level of security;
• Low fees for transfers within the app infrastructure.

What We Dislike About Money Wallets

• A limited number of vendors accept mobile wallet payments;
• Exchange rates tend to be very expensive;
• Money can only be withdrawn using a bank account.

Option 4: Mail the Cash Directly

While we don't recommend it, the simple fact is that many people still use the post to send cash directly to their recipients.

Although simple and cheap, we would strongly recommend against this method because of the high security risks that go along with it. When you send money through the post, the chance of your money being lost or stolen is comparatively extremely high. In addition, the savings you'd likely make after taking into account the postage fee are negligible in comparison to the fees associated with the methods above.

Sending money via the post might seem to make sense if you're sending very small amounts of money to someone without a bank account. Even in these cases, though, we'd still recommend against it, as the fees associated with sending a small amount of money using a money transfer provider for cash pickup would likely end up being only a few US dollars, or equivalent. For money orders in the US, fees are almost always less than $2. This leaves sending cash via the post a very bad idea in terms of the high risk you'd be taking for such a small reward.

If you do insist on this method, however, a good rule of thumb would be only to send money through the mail if you can afford to lose that money altogether.

What We Like About Mailing Money

• No costs outside of postage fees.

What We Dislike About Mailing Money

• Money is prone to theft;
• Money can be lost and not retrieved;

Which Way Is Right for You?

When sending money to somebody with no bank account, the method that's right for you comes down to where you live, where your recipient lives, and what their preferred method of payment is.

If you're sending to someone who actively makes payments using a mobile app, then it might be well worth exploring the options of signing up for that same app (if you haven't done so already) in order to transfer the money to them quickly and securely.

However, if your recipient doesn't use a mobile wallet, then sending cash securely would be your best bet. We'd recommend using a money order if you live in a country where they're in use and if you're sending money domestically, as this option is usually very cheap.

If you're sending abroad to somebody without a bank account, then you have a variety of low-cost options in the form of money transfer services offering cash pickup services. In this case, we'd recommend you run a search of our comparison engine to find out which one would be the best suited to meet your needs.

What if Your Beneficiary Could Get Banked?

If the beneficiary of your transfer doesn't have a bank account but could get one, you may be wondering which bank would be the best to choose?

At Monito, we frequently recommend to people who value saving money over perceived reputability to make use of neobanks, rather than traditional banks. This way, they'll be able to take advantage of most of the same services on offer at a traditional bank, often at the fraction of the cost and with increased ease of use.

Depending on where your beneficiary lives in the world, there's a fair chance that they would indeed have access to neobank services! For example, in North America, Europe, and large parts of the Asia Pacific region, neobanks are on the rise, with innovative fintechs taking up an increasingly large share of the financial services market with every passing year.

Some of the biggest names in the sector include N26, Revolut, Monzo, and Monese, but there are many others out there. Another option to consider might also be Wise Multi-Currency Account, which allows you to use one account make use of multiple bank accounts in several different currencies, namely in the British pound, the Euro, the Polish złoty, the Australian dollar, the New Zealand dollar, the Hungarian forint, the Singaporean dollar, and the US dollar.

To find out more about these neobanks and discover which one might make sense for you or your beneficiary, explore the resources below: