This is a usual procedure: transfer your money via an online wallet service, lose a couple of bucks due to transfer fees, withdraw the money to your bank account, wait for several days, and then lose a bit more along the way due to bank fees.
Sounds familiar?
If you ever used Skrill, Neteller, or services alike, you may have experienced this kind of a procedure.
It is not a big deal, you might think to yourself, there is no such thing as a free money transfer anyway. Right? Right.
Except, actually, there is a way of paying lower fees and saving a lot more with fixed fees, not percentage-based ones. What is the solution? It is called EMI – Electronic Money Institution – and it basically an online-only bank.
If you are frequently transferring money across borders from one account to another, especially within the Eurozone, it may cost you a lot. So, maybe you should consider using EMI yourself.
Let us explain why.
What are EMIs
Electronic Money Institutions, or simply EMIs, are digital banks with no physical branches. This kind of fin-tech service has been flourishing lately and has become particularly popular among people who often execute online financial transactions.
EMIs have emerged as an alternative to PayPal, Skrill, Neteller, and similar services, by providing apps that let customers manage their money and execute transfers as they go. For much lower fees.
The main advantages of EMIs are:
- Secured money transfers
- Fast transactions
- Digital-only approach
- Fixed fees
- Licensed and agreement-based accounts
- SEPA accounts
Why to choose EMI over other online banking solutions
Let us just say that the so-called online wallets usually have a 1% fee per transaction. Besides that, for every transaction that involves currency conversion, there is an additional 4% fee, added to the average daily interbank rate.
On the other hand, EMIs have a fixed fee, and it moves in the range from €.20 to €1. And that’s it. The fee never goes over €1, no matter the amount of the transaction. So, lower fees are one of the main reasons people turn to EMIs. Also, money withdrawal is usually free of charge.
The other big reason is that these banks are exclusively online unlike the local bank institutions and their online banking solutions.
EMIs tend to be very fast, too, by providing money transfers that are finished within 10 minutes.
Online money transfers from and to SEPA countries are holding a great share of the market. So, having a SEPA account is another bonus that EMIs offer to its customers. Basically, these electronic institutions enable their users to have an online IBAN bank account within the SEPA region.
Another important notion for the EMIs is the fact that these are the licensed-based institutions. So, you can rest assured knowing that transactions are secured and legally regulated.
EMIs could really be a trustworthy partner for the online money transfers, especially if you are executing such transaction frequently.
If you are interested in this topic, but not sure where to start, take a look at our recommendations for some of the best electronic money institutions out there.
Top 5 EMIs to use in 2019
1. MisterTango
MisterTango is a virtual bank that operates within the EU and offers accounts with IBAN and SEPA transfers, free MasterCard payment cards, and payment services for e-commerce websites. Everyone can open a free account in euros and send payments for free. International transactions and online money transfers can be made much easier, faster, and cheaper, both for individuals and for businesses. If you decide to open a business account, MisterTango is open for crypto-related business and exchanges, and it offers competitive pricing for your financial management.
2. Monese
Monese service was born in 2015 out of the necessity that its founder Norris Koppel experienced himself. Namely, when he moved to the UK from Estonia, he wasn’t able to open a bank account without a UK credit history or utility bills proving his address. So, he has started a banking service that is inclusive, instant, on-demand, and 100% mobile. It has grown to become a reliable EMI with a 9.1 rating on Trustpilot. People from all over the world can easily open a Monese account for free. As advertised, there are no hidden fees and there are no restrictions such the local banks might impose. Also, you will get the real exchange rate. When it comes to pricing, there is a free Starter option, with different fees applying to some transfers. Besides that, there is the Plus option for £4.95 a month with reduced rates on top-ups and transfers, as well as the Premium option costing £14.95 per month and providing unlimited withdrawals and no fees on top-ups or transfers.
3. Revolut
If you want to stay in control of your business finances, Revolut offers you a free webinar to get you on board. Their experts will tell you all about the ways you are going to make savings on fees and save hours of administration. If you are an individual who frequently executes online money transfers, you can sign up for a Revolut account in minutes, and you can choose one of 24 offered currencies for your account. The main difference compared to traditional banks? Well, those banks would charge you when you spend money internationally or transfer your money online. Revolut is not going to do that. They promise you a radically better account.
4. LeoPay
LeoPay is the EMI that offers its users free multiple IBAN digital accounts in more than 10 currencies, free Visa Card for payments around the world, free person-to-person (P2P) payments, and a non-stop access through the website or a dedicated mobile app. With your Visa Card you will have the options of international payments free of charge, ATM withdrawals worldwide, instant card locking from the app, and secure contactless payments. For SEPA money tansfers, LeoPay promises competitive rates on transfer fees and currency exchanges. Besides that, this online bank offers secured cross-border payments to any country, moving funds between your own multiple accounts opened for specific purposes, and performing mass payments with a single click.
5. TransferWise
Since their inception in 2011, over 4 million people have used the TransferWise for money transactions in more than 60 countries around the world. As advertised, you could save up to 8 times compared to a bank when you use TransferWise to send money, get paid, or spend money internationally. It is free to create an account and it takes a few minutes to set it all up. There are options for individual and business accounts, and people you want to send money to do not have to own a TransferWise account. Every transaction is safe and secured, while data processing is encrypted with SSL.
Since their inception in 2011, over 4 million people have used the TransferWise for money transactions in more than 60 countries around the world. As advertised, you could save up to 8 times compared to a bank when you use TransferWise to send money, get paid, or spend money internationally. It is free to create an account and it takes a few minutes to set it all up. There are options for individual and business accounts, and people you want to send money to do not have to own a TransferWise account. Every transaction is safe and secured, while data processing is encrypted with SSL.
The bottom line
Electronic money institutions have become a widely popular alternative to traditional banks and online wallets that charge big fees for almost every transaction. So, millions of users are turning to EMIs because these have appeared to be safe, reliable, licensed, and much faster and cheaper to use. EMIs are especially interesting for people who perform a lot of online money transfers, whether personally or professionally. The benefits from their use usually include:
- Sending money abroad for a lot lower fees
- Fast bank transfers
- Encrypted and secured transactions
- IBAN online accounts in compliance with SEPA regulations
