While reliable, traditional bank transfers can sometimes be a hassle. They often have high fees and long processing times, and they require the sender and recipient to have a bank account. Sending money via gift cards offers a flexible, faster alternative that bypasses many of these limitations.
These challenges have led many people to explore alternatives, including gift cards, as a viable solution for sending money. Gift cards, particularly prepaid Visa/MasterCard or retailer-specific cards like Amazon or Flipkart, offer several advantages over traditional bank transfers.
How Gift Cards Work for Sending Money
Gift cards are a convenient and flexible way to transfer money. Prepaid cards, such as Visa or MasterCard, can be used anywhere that accepts card payments, both online and in-store. Retailer-specific cards, like Amazon or Flipkart, are designed for more targeted use and are often limited to specific platforms.
The process of sending gift cards involves purchasing the card online or in-store, either in physical or digital form and then sending the card code or physical card to the recipient. In comparison, bank transfers can involve multiple steps, such as setting up accounts, providing bank details, and waiting for verification. Gift cards simplify this process and offer a quick, straightforward alternative.
Read related blogs: How to Use Digital Gift Cards for Global Transactions
Top Benefits of Sending Money via Gift Cards Instead of Bank Transfer
1. Lower Costs and No Hidden Fees
One of the most significant advantages of gift cards over bank transfers is the low cost and fee transparency.
No Transfer Fees: Unlike traditional bank transfers, which may charge significant fees, gift cards, especially digital or prepaid cards, often have little to no charges.
Avoiding Extra Charges: Bank transfers may involve additional charges, such as service fees, currency conversion fees, or intermediary bank fees, which gift cards don’t have.
Transparent Costs: The cost of a gift card is often clear upfront, making it easier to budget. With bank transfers, fees are sometimes hidden in the fine print, leading to unpleasant surprises later.
2. Faster Transfer Times
Gift cards provide a quick and efficient alternative to bank transfers, especially for urgent transactions.
Instant or Near-Instant Delivery: Digital gift cards can be sent and received almost immediately, making them ideal for time-sensitive situations. In contrast, bank transfers can take 1 to 5 business days.
Speed of Redeeming Funds: Once the recipient receives the gift card, they can use it immediately, avoiding waiting for a bank transfer to clear or funds to become available.
No Waiting for Bank Approval: Unlike bank transfers, which can be delayed due to verification and approval steps, gift cards can access funds immediately.
3. No Bank Account Required
Gift cards offer an excellent solution for those who don’t have a bank account, providing more inclusive options for sending and receiving money.
Access for the Unbanked: Many people worldwide lack access to traditional banking services. Gift cards allow them to receive and use money without a bank account.
Convenience for the Underbanked: In areas where banking infrastructure is not widely available, gift cards offer an easy, secure way to transfer money without bank involvement.
4. Global Accessibility
Gift cards can be used worldwide, making them ideal for international money transfers.
International Reach: Prepaid Visa/MasterCard or retailer-specific gift cards can be used internationally, offering flexibility that traditional bank transfers may not provide.
Wide Redeemability: Wide redeemability is a significant advantage over bank transfers, which may be restricted by location or bank policies. For example, Amazon gift cards can be used across different countries and regions, allowing recipients to shop on local versions of the platform.
5. Security and Privacy
Gift cards can offer a higher level of security and privacy compared to traditional bank transfers.
Reduced Risk of Fraud: Sending money via gift cards eliminates the need to share sensitive bank account details, which can reduce the risk of identity theft and fraud.
Anonymous Transactions: Gift cards can be sent without the recipient providing detailed financial information, ensuring a more private transaction than bank transfers, which often require such details.
6. Flexibility for Recipients
Gift cards offer recipients a variety of ways to use the funds, enhancing their flexibility compared to traditional bank transfers.
Use for Specific Purchases: Retailer-specific gift cards like Amazon, Walmart, or Flipkart provide recipients with specific products or services they can buy, which is ideal for focused needs.
Choice of Redemption: Prepaid Visa/MasterCard gift cards allow recipients to use them wherever such cards are accepted, both online and in-store. It offers more versatility than bank transfers, which often require the recipient to transfer funds to a bank account before using them.
7. Easier for Small Transfers
Gift cards are an excellent option for smaller transfers, providing flexibility and cost-effectiveness.
Ideal for Small Amounts: Sending small amounts of money through gift cards is often more cost-effective, as bank transfers may charge fees disproportionate to the transfer size.
No Minimum Transfer Limits: Unlike bank transfers, which often have minimum transfer limits, gift cards can be purchased for any amount, making them ideal for sending small payments or gifts.
8. Convenience for Sending Gifts
Gift cards combine the functionality of sending money with the joy of gift-giving.
Gift Cards as Gifts: Sending gift cards for special occasions such as birthdays, holidays, or celebrations adds a thoughtful, personal touch. Unlike purely financial bank transfers, gift cards allow recipients to send money while offering a meaningful gift.
Personalization: Many gift cards allow for personal messages, making the gift feel more personalized. Bank transfers, however, lack this aspect of customization.
Read related blogs: What Are the Best Gift Cards for International Money Transfers?
How to Choose the Right Gift Card for Sending Money
Choosing the correct type of gift card is essential to ensure the recipient can easily use the funds. Different cards serve different needs, depending on usage preferences and location.
Prepaid Visa/MasterCard: Ideal for general use, offering broad international acceptance and flexibility for recipients to use funds however they choose.
Retailer-Specific Gift Cards: This is great for recipients who need specific goods or services from well-known retailers such as Amazon, Flipkart, or Walmart.
Digital Gift Cards: Perfect for quick, online transfers when the recipient needs immediate access to funds.
Multi-Currency Gift Cards: Some gift cards provide currency conversion options, making them perfect for international transfers and reducing concerns about exchange rates.
Potential Limitations of Using Gift Cards vs. Bank Transfers
Despite their advantages, gift cards have some limitations compared to traditional bank transfers. Understanding these drawbacks helps ensure informed decisions when selecting a transfer method.
1. Limited Redemption in Certain Countries
Not all gift cards are accepted worldwide. Retailer-specific gift cards, in particular, may be limited by region, so it’s essential to consider where the recipient can use the gift card before choosing it.
2. Restrictions on Use
Some gift cards may only be used for online purchases or within specific platforms, limiting the recipient’s flexibility compared to cash or bank transfers. It’s essential to choose the right card for the recipient’s needs.
3. Security Concerns
While gift cards are generally secure, there’s still a potential for scams or fraud. It’s crucial to use reputable platforms to purchase and send gift cards.
Conclusion
Gift cards provide several advantages over traditional bank transfers, including lower fees, faster processing times, and greater security. They are particularly beneficial for smaller, international, or gift-oriented transfers. Furthermore, they offer enhanced privacy and convenience, especially for those without access to a bank account. For the next money transfer, consider using gift cards as a faster, more cost-effective, and flexible solution that meets your and your recipient’s needs.
Apps like Beem can simplify managing and sending money securely, offering low fees and fast international transfers. Beem supports multiple payout options, making reaching loved ones across borders easier. Its user-friendly platform ensures quick transactions without the hassle of traditional banking delays.
