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Best Ways to Send Funds in the Digital Age

Here's how to take advantage of technology to move your cash

spinner image Best ways to send money
These days, it's easier than ever to send money in a pinch.

Whether you have a child or grandchild back on campus this fall (or maybe a friend or other relative in a financial bind), it's never been easier or faster to get money to someone who needs it. Here's an overview of the latest and greatest ways to send money quickly, and the pros and cons of each.

Apps, Apps and More Apps

Payment apps are simply a service that allows you to send money to another person (often by email, text or direct account transfer) via an app or website. These are commonly known as peer-to-peer or person-to-person money transfer apps or simply P2P apps or payment apps.

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Most payment apps use a digital wallet method of transfer, meaning when you send money, it delivers the payment to a digital wallet, after which the recipient transfers the money from the wallet into his personal account. Think of it as a virtual escrow account.

A few words of caution: People are often under the impression that all payment transfers happen instantly, but it's important to realize that many times they do not. This time gap puts those who accept payment via one of these apps at risk for a scam in which the payment is canceled or reversed after you have delivered the goods or service. This scheme isn't new, as it has been perpetrated using paper checks for decades, but it is why most of these applications recommend that you avoid making payments to people you don't know. The safest payment method for these types of transactions is cash or PayPal with the "goods and services" fee option.

These are among the most popular apps for sending money within the United States:

PayPal: This is probably the modern money transfer service that most people are familiar with. It's important to know that PayPal is free only if you're using a linked bank account or if you have a PayPal balance. Otherwise, the service is relatively costly (2.9 percent plus 30 cents for debit and credit cards) and perhaps not as fast as other apps if you are using a linked bank account to make the transfer. A nice thing about PayPal is that if you're not doing a transaction with a trusted friend or family member, you can select the "goods and services" option (which charges the seller a fee) and receive PayPal's purchase protection. Be aware that the purchase protection does not apply to goods or services bought in person or to transactions using the friends and family option.

Venmo: Owned by PayPal, Venmo works a lot like it, only with a different transfer limit policy — if you do not confirm your identity, you can send $999 a week; if you do, your limit goes up to $19,999 per week and $3,000 per day. Venmo also offers speedier transfer times and a more "social" aspect. This last feature, similar to Facebook, allows friends to get a newsfeed of what you're paying for or whom you're sending money to, and they have an option to like or comment on your transactions. Younger generations seem to find this fun. Personally, I don't understand why anyone would want this feature, but if you adjust your privacy settings to "private," your transactions won't be seen by others.. If you're more private, like me, you'll probably want to go in and change the default setting before using it. Personal transactions on Venmo are free for those using a debit card or bank account transfer, but expect to pay a 3 percent fee to use a credit card.

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Square Cash: The Square Cash app is completely free, yet slightly more restrictive than some others, as it requires that payments be sent and received using debit cards or credit cards (there's a fee for the latter). But the benefit is that the payment is made almost instantly using a direct account transfer, rather than a digital wallet. This app also supports $Cashtags, which is a link like a hashtag that allows anyone to pay you by clicking on it and making a payment. Another nice thing about this app is that you don't actually have to have an app on your phone, because you can handle it all straight from your email. Once you're set up for Square Cash, you can essentially email money to anyone in the country. A word of warning: You'll want to secure and protect your email account as much as possible because anyone who accesses your email account will be able access your debit card, as well.

Google Wallet: You need to have a Google account to use Google Wallet (a drawback for some), but Gmail users can send money in email messages. This app has the same pros and cons as Square Cash. It's also free only if you're using a linked bank account, so it's not a good option for those who plan to use a debit card. Expect to pay a 2.9 percent fee for transfers made with a debit card. A big plus: Google Wallet comes with 24/7 fraud monitoring and covers 100 percent of all verified unauthorized transactions.

Facebook: Did you know that you can use Facebook for more than just posting pictures of your cat or arguing with friends about politics? Indeed, you can send and receive payments using Facebook Messenger — and it's free. Just click on the toolbar next to the Message icon on a Facebook friend's page, and then select the Send Money option. You also can send money by composing a message to a Facebook friend and then clicking the "$" icon at the bottom. Facebook uses a direct account transfer method, rather than a digital wallet, which makes it a pretty simple option for sending money. But it requires that payments be sent and received using debit cards. It is also limited to your Facebook friends.

Bank payment apps: For customers who are risk-averse and worried about giving their account information to a third party, many banks offer a payment app as part of their online banking services. This is a great option because you don't have to provide your account information — including banking username and password — to a third party, which is required by many other payment apps as a way to verify your account. By using your bank's app, you won't have to put as much trust in the security of a third party. Popmoney is an app used by many banks, including Ally Bank, US Bank and Bank of the Ozarks. It's similar to other apps except it costs 95 cents per transaction.

Non-Virtual Ways to Send Money 

If you're a low-tech guy like me and have no appetite for apps, here are some alternatives for sending money in a hurry.

Walmart-2-Walmart transfers: If the recipient requires actual cash, instead of payment through a credit or debit card, this is probably the cheapest option. Under this method, money is transferred from one Walmart store to another. You send or pick up the funds at the retailer's Money Services desk. You can transfer up to $50 for $4.50 and up to $900 for $9.50, which can be more than half the cost of the fees paid by Western Union and MoneyGram.

MoneyGram: The second largest provider of money transfers in the world, MoneyGram allows you to send cash online using a debit or credit card or bank account, and the recipient can pick it up from any MoneyGram location within minutes. You can also send money from a MoneyGram location using cash. Fees are significant and vary based on the amount sent, the location and your payment method. For instance, to pay with a credit card to send $100 online to any location in the United States, the fee is $12.99. Estimated fees are available online.

Western Union: Formerly a telegraph company, Western Union is now the world's largest money transfer provider. Keeping up with the times, Western Union has a payment app that allows you to send money for a fee, but its specialty (like MoneyGram) is still sending cash. Fees, whether you use the mobile app or send cash, vary based on the amount, location and payment method. When it costs $8 to send $100 from a debit or credit card to a bank account, it's easy to see that the mobile app is definitely not a bargain when compared with most other payment apps, and the transaction times can be slower.

Wire transfers at your bank: Fees can be quite high, but if you're sending a large amount of money, say, $10,000 or more, it may be your best option. Benefits are that wire transfers are nearly instantaneous and very secure. According to personal finance site NerdWallet, the average wire transfer fees among the banks surveyed are $8 for incoming domestic wires, $10 for incoming international wires, $25 for outgoing domestic wires and $42 for outgoing international wires.

Or go back to the future: Of course, if snail mail is fast enough to meet your money transfer needs, you could always send someone a money order from the U.S. Postal Service (a $500 money order costs just $1.20) or even an old-fashioned personal check, although the recipient's bank might not cash it right away. Speaking of the lost art of writing personal checks, did you know that there has been a fivefold increase over the past decade in Google searches for instructions on "How to write a check"? I'm filing that disturbing financial fact under "Stop the world, and let this old guy get off."

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