Coronavirus and your family: 6 ways to send money to those in need

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Few Americans entered the coronavirus pandemic with an adequate amount of savings.

Around the time when the first U.S. COVID-19 case was discovered, just 41 percent of surveyed adults said they would be able to cover a $1,000 emergency expense with their savings. Nearly 4 in 10 respondents (37 percent) in the Bankrate survey said they would borrow money in some capacity, including 14 percent who say they would borrow money from family or friends.

If you’ve agreed to financially support your loved ones through these tough times, there are many ways to transfer funds. From payment apps to wire transfers, here are six different ways to send money to those in need without leaving the house.

1. Use a peer-to-peer (P2P) payment platform

Folks who are comfortable sending money through P2P payment platforms have many to choose from. Payment options include popular apps like PayPal, Venmo and Cash App.

Zelle is a standalone app that allows money to be transferred directly into the bank account of a friend or family member. Popmoney is also a payment option for sending money to someone you trust and may be available through online banking, depending on your bank.

The pros

Sending money through P2P payment platforms is often free. Using mobile payment apps is also relatively secure compared with other ways of sending money.

“Mobile payments are one of the safest methods of payment cardholders can choose,” says Peter Reville, director of primary research services at the Mercator Advisory Group. “They are all (near-field communication) NFC-enabled and use tokenization to pass information rather than the actual card numbers. Many consumers do not know about the safety of NFC.”

P2P payment platforms also provide easy and convenient ways to transfer funds. Transfers can be completed with limited information, like the email or phone number of the recipient.

The cons

In some cases, there’s an extra charge if you want to expedite the payment so that a family member receives it faster. For example, using Venmo in general is free, but a 1 percent fee applies when you opt for an instant transfer. Other platforms, like Popmoney, charge a small fee ($0.95) each time you send money. These fees can add up.

Another downside could be money transfer limits. Cash App, for example, lets you send up to $250 within a seven-day period and up to $1,000 within a 30-day period. These limits can be increased by verifying your identity.

Depending on the platform, there could be a delay in how soon your relative or friend receives money. Before using an app, it’s also best to find out what protections are provided in instances involving fraud and to protect yourself from possible scams.

“There are tools and ways you can monitor your transactions — staying close to your banking activity, using your bank’s mobile app to watch your transaction history,” says Angela Conti, head of consumer payments at TD Bank. “There are lots of ways that customers can make sure that they do not fall victim to a lost or stolen scenario or if there are scam attempts, to be careful about information that you might give out if someone were to call you. Never share passwords.”

2. Send a gift card

In the age of the coronavirus, consumers are limited in terms of the stores they can access. Still, it’s possible to send a gift card to a friend or relative.

Sites like Amazon give you the option of mailing gift cards from various retailers. You could also send a gift card using someone’s email address or mobile phone number.

The pros

Sending a gift card may be more appropriate than sending money straight into someone’s bank account, especially if the money is meant to be a gift for a birthday, graduation or another special occasion.

Gift cards are easy to send electronically through Amazon or by visiting the website of a retailer directly. Instead of sending a branded gift card from a specific company, you could send a Mastercard, Visa or American Express gift card that can be used at millions of different stores. These gift cards don’t expire.

The cons

Fees may apply in some cases. With Visa, American Express and Mastercard gift cards, for example, there’s usually a one-time purchase fee.

With gift cards, you’re limited in terms of the amount of money you can send. Some gift cards come with specific dollar increments.

Sending a gift card can also be risky. If it’s sent through the mail, for example, you’re at a loss if the envelope ends up in the wrong hands. Gift cards are also easy targets for scammers who can tamper with gift cards at stores and trick consumers into providing personal information as they purchase gift cards online.

3. Initiate a bank wire transfer

A bank wire transfer is another payment option for sending money during the coronavirus. It’s a method for sending money electronically to the bank account of someone else.

The pros

There are limits to how much money you can send at once if you’re sending funds via a P2P payment method or gift card. Bank wire transfers, however, allow you to safely and securely send thousands of dollars at once.

Delivery times vary, but it’s possible to send funds and have them received on the same day, especially if the transfer is done domestically. Bank wire transfers make sending money internationally less risky.

The cons

Bank wire transfers aren’t always cheap. Costs vary and there may be fees on both ends for the sender and recipient of the funds. International wire transfers may cost more and take a bit longer than domestic wire transfers.

You’ll also need to gather certain details before you can initiate a wire transfer, such as your account number and the recipient’s bank account number and routing numbers. Collecting this information could take a bit of time and you’ll have to be sure to enter everything carefully so that it gets to the correct person.

4. Initiate a non-bank money transfer

An alternative to sending money through a traditional bank or credit union is to send money using a non-bank transfer service, like Western Union, MoneyGram or Walmart’s payment services.

The pros

Non-bank transfer services allow users to send cash, which could be helpful if you have a family member or friend outside of the traditional banking system.

Funds can be sent and collected in many ways. With Western Union’s services, for example, it’s possible to send money online, over the phone, in-person and within the app. Recipients can pick up cash or have it sent to a bank account or mobile wallet. Due to the coronavirus outbreak, customers are being asked to send money mainly online or through the Western Union app.

Through non-bank transfers, it’s also possible to quickly send funds around the world.

The cons

Sending money through a non-bank payment center can get pricey depending on how the money is sent.

There are often limits on how much money you can send at once, depending on the channel and where the recipient is located.

Consumers should be careful and try to avoid fraud and scams, especially during emergency situations like the current pandemic.

5. Use a social platform

Some social media platforms have made it easy to send money to family and friends while you’re crafting posts and videos for your friends and followers. This is possible through Facebook Messenger, for example.

Snapchat once had a mobile payment option that was shut down in recent years.

The pros

Sending money via social media could be convenient and helpful if you’re already a heavy user of the platform. If you’d rather not have a hundred different apps on your phone, it could be a good idea to have a central platform that you use for communicating with loved ones and sending them funds.

The process of sending money using social media is also easy. You don’t have to go through the trouble of gathering payment information from a friend or relative. And there’s a good chance that the person you’re sending money to already uses social media.

With Facebook Messenger, transferring funds can be done within an ongoing conversation in seconds, as long as a debit card or PayPal account is connected to the Facebook account. Sending money via social media is also affordable. Facebook’s service, for instance, is free.

The cons

There may be extra steps you have to take to use these services. Skype lets users send money to each other as long as they have a Microsoft and PayPal account.

Limitations apply and sometimes there are fees charged. Skype’s website, for example, warns of a possible transaction fee that PayPal could charge in certain circumstances.

There could also be a delay in receiving the funds. Facebook’s website says it could take as many as three to five business days for the money to be made available. Fraud could be an issue, too, unless there’s effort put into protecting oneself online by regularly updating passwords, enabling two-factor authentication and using a secure internet connection, among other things.

There aren’t too many options available for social media users who want to send money through their social channels. But for contactless payments overall, more innovation is likely on the way, especially as a result of the coronavirus and its impact on how commerce is being done.

“The pandemic has certainly highlighted consumer needs and changes in behavior,” says Conti from TD Bank. “So yes, I do think as we look ahead as an industry, we will be very focused on how do we adapt and how do we better serve the needs of our customers?”

6. Use a digital wallet

Another opportunity for folks looking for a way to send money is to use a digital wallet platform. Google Pay is a good example. In addition to using it while you shop, you can also send money to family and friends.

A similar service is available through Apple Pay Cash. Money can be sent via an iPhone or Apple Watch. You can even tell Siri to send money to someone in your phone.

The pros

The ability to send money via Google Pay or Apple Pay Cash could be helpful if you already use a mobile wallet regularly or you’re looking for a new contactless payment option during the pandemic.

Sending funds through these platforms is easy and limited information is required. Sending money through Google Pay, for instance, just requires a phone number or email address.

The cons

There are limits in terms of how much money can be sent. With Google Pay, you can send up to $10,000 at once in most places in the U.S., but a bank account is needed for transactions above the $2,500 threshold.

Other limitations may apply. With Apple Pay Cash for instance, you have to be an Apple user to get access.

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