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Safe ways to send cash

There are lots of reasons to send cash these days: online and mail-order shopping, bill payments or bail-out loans to kids at college. And along with the ever-increasing reasons to send money, there is a growing number of ways to do so.

One of the oldest -- 100 years old, in fact -- is Western Union. Today, the company offers a variety ways to send cash: in person at a Western Union agent's location, by telephone and over the Internet. Figuring out the finer points of each can be a bit confusing, especially since stated Western Union policies sometimes seem to conflict with information given by individual agents. These agents, located worldwide, operate as both sending and receiving depots and are found in such places as variety stores, supermarkets and money service operations.

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Western Union lets you send funds using cash, debit or Visa, but this depends on what the individual agent offers. At some, it's strictly cash-only, while at other locations debit and credit cards are accepted, though one Toronto agent quoted an additional nine per cent fee to send via Visa. On the other end, the recipient will get cash, a Western Union cheque or some combination of the two. Just how much of each depends, since it's not cast in stone. Again, it's pretty much up to the discretion of the agent on the receiving end.

Both senders and receivers fill out forms, and identification can be required of both. Just what type of ID is acceptable is the agent's call, although most require government-issued photo ID. One Toronto agent erroneously stated that provincial health cards are "no longer accepted, it's the law," but Western Union's stated policy says recipients can "answer a test question" in lieu of having proper photo ID.

The cost of sending money
The cost to send cash with Western Union varies with the method used for transfer. Using $150 sent within Canada for comparison purposes, the cost would be $18 if sent through an agent and $35 if using the online or telephone systems. The quote for telephone service "may vary according to sender location and is subject to change without notice," according to Western Union's info line.

Money sent in foreign currencies will carry an exchange rate set by Western Union. Again using our $150 example on a specific date, the rate for U.S. currency quoted by the Bank of Canada was 0.8951 while Western Union charged 0.86. The difference is "how we make our profit," according to one Western Union customer service representative.

At Western Union's currency rate on that date, it would take $174.60 to send $150 to the U.S., plus a $27 transfer fee ($8 cheaper than sending within Canada), for a grand total of $201.60.

There are no limits to how much money can be sent using the agent method (although increased security measures apply on higher amounts). Online transfer limits are $500 within Canada and the U.S. and $999.99 internationally.

On the recipient's end, the money is available within minutes. However, accessibility for pickup will depend on the receiving agent's hours of operation. You should call and check this out with the agent in question since actual hours don't always match those stated on Western Union agent listings.

Not the only game in town
Western Union isn't the only money transfer system that's been around for a good long time. Canada Post still does a pretty good job of delivering the mail, and cheques or money orders sent that way are an economical way to go. Postal money orders cost $3.95 within Canada and $4.95 to the U.S. If you are going to register your letter, this will add to the cost, but it will offer peace of mind. And while sending cash isn't illegal, it isn't advisable, since there's no paper trail should things fall into the wrong hands.

Banks also offer money orders (for between $6 and $7) and wire transfers. Better yet, if the recipient banks at the same institution as the sender, there are Interac e-mail money transfers. These cost only the network fee of $1.50 to send. There's a security Q&A to ensure the person on the receiving is the one intended, and stop payments can be made for $3.50.

To send, the sender and recipient both need an e-mail address and a personal Canadian dollar bank account. The participating financial institutions are Bank of Montreal, Scotiabank, TD Canada Trust, Royal Bank and CIBC except for President's Choice Financial.

For sending to someone outside of Canada, banks offer wire services for about $30. The cost depends on the amount sent and where it's going. Wires can be used within Canada but are a somewhat costly choice so they aren't the method of choice.

"Interac is associated with the established banking system, so there's a level of trust built into it," says Peter Hope-Tindall, a security expert in Toronto. "Personally, I'd be very worried to use one of the money transfer services offered on the Internet that isn't connected to Interac."

Hope-Tindall says the one service he has used with success to transfer money to vendors is PayPal, although he hasn't used it to transfer cash to a person. PayPal now offers free online money transfers to individuals. Both parties need a PayPal account and the money can be sent from a bank account, credit card or PayPal balance.

While PayPal is a widely used service for online purchasing, and is now owned by eBay, there have been problems in the past concerning withholding of funds or freezing of accounts.

A further option to send funds, especially appropriate for frequent transfers to the same person, is to set them up as one of the prelisted payees in your telephone or online banking portfolio. In fact, that's how Hope-Tindall transfers his five children's monthly allowances to them.

Diana McLaren is a writer in Toronto.

-- Posted: Sept. 27, 2006
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