How to get money for family and friends in a crisis
Giving money to loved ones can be a priority right now, especially for those who are sick, unemployed, or unable to venture away from home. You also want to ensure your safety and that of the recipient.
Bearing in mind that social distancing guidelines in the coronavirus pandemic recommend keeping 6 feet away from others, you have options other than personally handing over money, some in just seconds. Here is what you need to know.
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Consider the needs of the recipient
To choose the method of sending money that works best, consider:
What will the money be used for? You don’t need a list, just a general idea. Does your loved one need a one-time payment for something specific, like groceries, or will they need recurring transfers to pay their bills?
Does your loved one have a bank account? Some transfer options require both parties to have a traditional checking or savings account at a bank.
Are they comfortable with online or mobile technology? Options like peer-to-peer (P2P) payment apps, including the popular Venmo platform, are convenient, but may not be right for everyone.
“If you are using a P2P app, you need to make sure that the recipient has the ability to use that app to accept money and that they can use that money to spend online or in stores,” says Ben Jackson. , Head of Operations at Innovative Payments Association.
And if you plan to send money through the mail, some options are safer than others.
“It’s never safe to send money in the mail,” says Meiko Patton, communications program specialist with the US Postal Service.
Once you have a good idea of how they can receive the money, you can narrow down which option to use.
6 quick ways to send money in a crisis
1. Zelle: free and fast
This P2P transfer service is a partner of more than 750 banks and credit unions and is integrated with the websites and mobile applications of many financial institutions. Both sender and receiver must have a bank account and register with Zelle with an email address or phone number.
Best for: One-time or recurring payments for people who have set up their banking services online or on a mobile device.
Delivery speed: In a few minutes on a bank account in general; up to three days for recipients registering for the first time with Zelle.
Security: Once the transfer is complete, there is no way to undo it. Make sure you confirm that you are sending money to the right person.
2. Digital gift card: free and fast
Many large merchants offer electronic gift cards, which you can find on their websites or on sites like giftcards.com and giftcardmall.com. You can email a gift card and schedule it to arrive on the same day or at a different time. Some gift cards work at multiple companies, including Visa gift cards and those for food delivery companies like GrubHub and DoorDash.
“Make sure the e-gift card can be used now. Is this store nearby? Are they open and offer curbside pickup or delivery? Says Shelley Hunter, Gift Card Industry Expert at Giftcards.com.
Best for: Unique gift to use online or print for in-person purchases.
Delivery speed: Up to 24 business hours for orders on giftcards.com and giftcardmall.com, depending on processing.
Security: The recipient usually receives an email message with a link to the electronic gift card to use. The use of gift cards does not require identity or bank account information. Again, making sure you have the correct email address for the intended recipient is crucial.
3. Third party P2P applications: free or fast
PayPal, Square Cash, Venmo, and Apple Pay Cash can be good options if you and your recipient have the same app. But they all have the same hurdle: Free delivery to a bank account isn’t instantaneous. The standard lead time tends to be several days. To transfer funds to a debit card in minutes, the recipient must pay a fee, typically around 1%, with a maximum of around $ 10. You can choose to send more money to cover these costs. Some apps offer debit cards that allow recipients to use funds right after a transfer.
Best for: People who have the same transfer apps and are not afraid to choose between free delivery with delays and instant paid delivery.
Delivery speed: Either in a few minutes or in several days.
Security: Completed transfers cannot be canceled. Each app has its own procedures, but they typically use two-factor authentication and email alerts for password changes. Apple Pay Cash can confirm payments by fingerprint and facial recognition.
4. Transfers between prepaid debit cards: Fast
These work like debit cards for purchases and bills, except that you load money onto the card before you use it. One strategy is to buy two: one to send to your loved one and the other for you. Then transfer from your card to the other. Or use a card like American Express’s Bluebird, which offers a master account with sub-accounts, each with its own card. You can link your bank account to your card and transfer money for free to and from the sub account cards. Prepaid cards may have monthly or other usage fees; do your research to find the cheapest options.
Best for: For people who don’t have a bank account or need help budgeting and prefer a quick and easy option for recurring payments.
Delivery speed: Usually within minutes between cards of the same brand.
Security: Varies by prepaid company or bank. Unlike gift cards, every prepaid debit card must be registered with an identification, such as name, social security number, and home address, to use full functionality.
5. Bank transfer: Fast
Traditional banks have a real-time transfer option, wire transfers, which it’s expensive to send and receive money. The cost may be worth it in urgent circumstances, especially if you are sending thousands of dollars. (Alternatively, if you don’t mind a few days delay, you can choose the low-cost or no-charge option to send an online transfer to a linked account via ACH transfer.)
Best for: Large one-time payments.
Delivery speed: In a few minutes on a bank account in general.
Security: The wires run through the Federal Reserve system, which banks, businesses, and government agencies use regularly. As with P2P applications, you cannot reverse a thread.
6. Money order: Sometimes fast
Like a personal check, this piece of paper requires a sender and a recipient, and you must mail it. Money Orders are available at the Post Office, Walmart, and Western Union, and cost a few dollars. A recipient can cash a money order either by going to the same type of place where it was purchased, such as the post office, or by using their phone’s mobile app to deposit it into a bank account.
Best for: People who do not have Internet access at home or a bank account, and others who prefer to receive money offline.
Delivery speed: One- to three-day priority mail are options, depending on your region.
Security: A lost or stolen money order can be replaced if you have the receipt.