Send Money to Colombia
With 10% of its population living abroad, Colombia is one of the main countries of origin of migrants from Latin America. If you are one of those ex-pats, or wish to buy a property, invest in a business, or simply send a gift to a loved one; it helps to know the alternative ways to send money to Colombia. Read on for further details on the best providers, including Xe Money Transfers, WorldRemit, or Remitly.
How to Send Money to Colombia Using a Money Transfer Provider?
The process of sending money to Colombia by using an online money transfer service is simple. You only need to follow these three steps to execute a transaction:
Step 1: Compare providers to find the one that best fits you
Step 2: Sign up with the chosen provider
Step 3: Transfer money
How to Send And Receive Money In Colombia?
Remittance inflow to Colombia reached a staggering $800 million in December 2021 alone and has been on a steady increase since 2005. Though the Colombian pesos are not heavily traded, it is fairly easy to transfer money to the country quickly, cheaply, and securely.
Ways to Send Money to Colombia
Below is a rundown of the alternative ways of sending money to Colombia — based on cost, speed, and security.
Money Transfer Services
Web-based platforms, such as WorldRemit, Xe Money Transfers, or Remitly, offer favorable exchange rates, speedy delivery, and low to no transaction fees. There are also a range of depositing options. These providers aim to challenge banks, so they offer services at a much lower cost.
Senders can simply sign up for a free account, choose a suitable payment method (bank transfer or debit/credit card), and transfer their money with a few clicks. The profit margins on exchange rates range from 1% to 2.3%, while fees vary depending on the amount and desired transfer time. Overall, they are the cheapest and fastest way to send money to Colombia.
A wire transfer will communicate between two banks to move your money around. Depending on the Colombian bank of choice (Giros y Finanzas, Bancolombia, and Banco Davivienda SA, for example), the transfer can be done in minutes. Some companies, like Western Union, make money from higher exchange rates — which are almost certainly guaranteed to be higher than online providers. Ultimately, the security of wiring comes with a high cost.
Bank Account Transfers
The Colombian banking system is vast, consisting of over 14 banks with over 5,700 branches and 16,000 ATMs spread across the country. Its leading institutions, including BBVA, Citibank, and Banco Popular Colombia, accept international payments. As with any country, bank transfers mean a trade-off between security and cost.
The fees can go up to $50 or any currency equivalent, and waiting times can be as long as five different days. It may be the safest way, but definitely not the fastest or the cheapest option for sending money to Colombia.
Also known as neobanks, challenger banks operate on a digital-only basis and can operate with much lower costs. They can offer competitive rates and low transaction fees, but they come with certain liability issues despite being regulated. While it may not be a big concern for small, one-off transfers, they are not the best option for large sums or regular payments.
Mobile Apps and Payment Services
Money transfers through payment services like Google Pay are extremely limited outside of the US. Google Pay is one of the few operators that launched a limited service, and users located in the US now can send money internationally through Western Union or Wise. It is not a very accessible option to send money to Colombia.
PayPal offers a variety of ways to send money to Colombia, including PayPal wallet, cash pickup, and bank deposits. With over 20 years of experience, top-notch usability, speed, and safety, PayPal gained incredible brand awareness, yet it continues to lose its competitive edge due to poor exchange rates and high fees.
Transfer Money to a Pick-up Location
Services like Western Union, Xoom, or Xe Money Transfer offer an option for recipients to pick up their transfer in cash from the closest agent. This is handy in cases where the recipient can’t access their bank accounts, but typically different fees apply when compared to online transfers. Your funds can be ready for collection within 30 minutes.
International Money Orders
If it is available in your home country, some postal offices allow senders to create an international money order to collect your money when you arrive. Though they are usually safe and quick, there’s no guarantee of a competitive exchange rate.
What Do You Need to Send Money to Colombia?
Casual transfers under $5,000 or equivalent typically require basic personal information like an email address or photo ID. Still, operators may ask for further verification depending on the transfer size or destination. Here’s a list of requirements;
A valid photo ID: A driver’s license or passport.
Proof of address: Such as a utility bill.
Sender’s details: Bank account details, name, and address.
Proof detailing money’s origin — For large transfers, such as property purchases or investments.
What Are the Ways of Receiving Money in Colombia?
Depending on the operator, recipients can collect their cash from pick-up points, have the money delivered, or deposited into their bank accounts. Here’s a rundown of all alternative ways.
Recipients can pick up their cash from a specified branch of the operator. Depending on the operator and the sum, money can be ready for collection in as quickly as 30 minutes.
Direct Bank Deposit
This way, the money is directly deposited into the recipient’s bank account. In some cases, the recipient might have to pay a small fee as well as the sender, which would be deducted from the transfer.
Instead of traveling to the agent, the recipient can get their cash delivered for a small fee paid by the sender and is subject to local availability. The recipient should have their documents ready to verify the transfer.
What Do You Need to Receive Money in Colombia?
The requirements depend on how often the recipient gets international transfers, the transfer amount, and the operator:
A valid photo ID: A government-issued ID is necessary to verify the transfer.
Declaración de Pago form : First-time receivers should fill this form to authorize international transfers.
Sender’s information: As it appears on official documents.
A valid bank account: For the deposit of the money.
Reference or tracking code: For the transaction.
Top Money Transfer Providers to Send Money to Colombia
Xe Money Transfers - Best for Sending Money to Colombia
With unbeatable rates and a variety of plans to support all sorts of payments, Xe is a loyal companion for all your transfers to Colombia. There are no transaction fees above $500, while fees are as tiny as $2 for anything smaller.
It’s particularly suitable for business and large payments, as qualifying users will be assigned a dedicated account manager to help you mitigate challenges along the way.
Getting Started in Three Steps
Step 2: Use the converter tool to check the rates.
Step 3: Fill in your details and confirm the transaction.
Western Union, Wise, WorldRemit
WorldRemit - Best for Sending Small Amounts
Dubbed as the “WhatsApp of money,” WorldRemit is simple, straightforward, and reliable. Along with basic delivery methods, the company partners with telephone operators to allow the transfer of funds in Colombia directly to a mobile.
It is not suitable for large transfers or business-related payments, but it is a loyal companion for friends and families separated by borders.
Getting Started in Three Steps
Step 1: Head to WorldRemit website.
Step 2: Fill in your transfer details.
Step 3: Sign up and proceed with your transfer.
Wise, Xe Money Transfers, Remitly
Remitly - Best for Personal Transfers
Serving over three million users across the globe, Remitly is convenient as it is reliable. With express and economic options, it accommodates a variety of user needs, budgets, and delivery preferences.
Senders can cancel their transfer anytime before it is complete or request a refund after completion, and Remitly will deposit the full amount back to their accounts.
Getting Started in Three Steps
Step 1: Head to Remitly website.
Step 2: Fill in your details.
Step 3: Sign up for an account to complete the transfer.
WISE, WorldRemit, Western Union
What Are the Fastest Ways to Send Money to Colombia?
Fast delivery often comes at a higher cost and plenty of operators offer express services for an additional fee. But the market has seen more and more providers making express services their standard.
Operators listed above will send your transfer to Colombia in a matter of minutes while still maintaining low costs. Delivery time depends on the payment method; for a quick transfer, you may want to opt for credit/debit card payments rather than bank transfers, which can take up to three working days.
What Is the Cheapest Way to Send Money to Colombia?
Finding the cheapest operator will mean looking out for small flat fees or comparing margins on exchange rates to get the most competitive. The most suitable way will depend on the amount you are sending.
Thanks to the heavy competition, you don’t always have to sacrifice speedy delivery for a cheap transfer. The companies listed above will perform the task with no additional fees and competitive exchange rates.
What Is the Safest Way to Send Money to Colombia?
Thanks to long-lasting legacies, banks are traditionally thought to be the safest way to send money abroad. However, wiring companies, challenger banks, and money transfer operators are fully regulated and have procedures in place to safeguard your money.
Operators listed above go beyond industry standards to ensure extra security for your transfers — which would provide peace of mind when shopping from Colombia, sending out large sums of money, or to people you don’t know very well.
What Are the Best Apps to Send Money to Colombia?
Many operators invest an awful lot in their mobile apps to get ahead of the competition. It’s imperative that senders look out for easy-to-navigate apps to send money abroad to avoid bugs or complicated processes that may jeopardize your transfer.
Mobile apps listed are developed by reputable operators and have excellent customer reviews. Besides getting the job done in a few clicks, they offer further features such as budgeting or stock trading.
Things to Consider When Sending Money to Colombia
Here’s the good, the bad, and the ugly of sending money to Colombia — make sure to get to know everything there is to know before tangling yourself in legal trouble.
Banco de la República heavily regulates currency inflow and outflows from the country to curb money laundering. Since 2014, recipients have been obliged to submit a series of documentation to qualify for international transfers.
The maximum amount you can send through using online services and banks varies between $3,000 and $6,000 — yet most operators will help with larger amounts to save you from legal trouble. In any case, it is highly advisable for the recipient in Colombia to consult with a tax professional.
How Much You Are Sending Abroad
The amount of the transfer often affects the fees; based on the operator, you may pay higher or lower fees for larger transfers. The amount of the transfer also affects the taxes, and different regulations apply based on the type of transfer.
The bank or payment operator should inform the recipient on what forms to fill and where to submit them in detail — which would prevent late filing penalties or cancellation of the transfer altogether.
The Cost of Money Transfer
The costs involved in sending money to Colombia may include the following;
Profit margins on the mid-market exchange rate.
Transaction fees (flat fee or percentage mark-up).
While margins vary between 0.3% to 2%, flat fees are typically low, hovering around $2 to $20. As the operators typically impose one of the two ways to make money out of transfers, there isn’t really a free way to transfer funds to Colombia.
Colombian Peso volatility means senders can opt for features like a fixed fee for a period to prevent their money from losing value.
Payment Type and the Reason For the Transfer
All personal income, including non-employment income, is subject to tax regulations above a certain amount. The remittances are taxable as long as the individual provides the service on Colombian territory.
Unfortunately, there aren’t a lot of operators that offer services for business payments to Colombia, with Xe Money Transfers being one of the few with such plans.
Safety and Security of the Provider
All the operators listed here are fully regulated by leading international financial institutions — which ensures secure transfers and safeguards your money against fraud or being lost due to the operator’s potential financial troubles.
Although transfers through commercial banks or well-known brands like Western Union or PayPal seem like the safest options, regulated operators are just as safe as long as the senders take appropriate measures to know the recipient.
Tax Regulations in Colombia
The tax regulation for international transfers to Colombia depends on the amount and reason for the transfer, regardless of the method of choice. Income from non-employment sources is also subject to task over certain amounts, including monetary gifts. The recipients will have to file tax returns for payments as such.
Remittances over COP 1,911,600 per month are subject to 4x1000 tax, meaning that 4 pesos of every 1000 pesos over the maximum limit are collected as tax.