Sending Money Without a Bank Account: Your Options

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• Prepaid debit cards or gift cards are easy ways to send money to someone without a bank account.
• You can also easily send money online through a virtual wallet or payment app.
• If you’re sending money to someone who is unbanked, pay attention to security and potential limits.

Sending money electronically does not always require a bank account. Whether you’re paying someone for a service or giving money to a loved one, here are secure, non-bank money transfer options, plus additional resources for unbanked individuals.

Digital payment platforms

Mobile apps

Online payment services offer an easy way to send through your smartphone or computer.

PayPal, Venmo, Western Union, and Cash App are some of the most popular payment services that do not require you to own a bank account to receive money. 

If you use a payment app like PayPal, Venmo, or Cash App, your recipient may sign up for the app and link a prepaid debit card. 

Payment apps usually allow higher single transaction limits if you verify your account. For example, Venmo has a $299.99 weekly spending limit for people when they first sign up for their accounts. Once the person verifies their account, the transaction limit increases to $60,000 per week.

Digital wallets

Digital wallets are similar to payment apps. You can add payment information to your smartphone or smartwatch through an app. However, digital wallets store methods of payments through a unique process called tokenization, which essentially makes your information more secure.

Some digital wallets are only compatible with specific smartphones. For instance, you’ll need to have an Apple device to use Apple Pay.

When you send money via a digital wallet, the person receives the money in their digital wallet which can be used to make purchases in stores or online without the use of a physical debit or credit card. 

Prepaid debit cards and gift cards

According to a 2021 FDIC study, nearly a third of unbanked households commonly use prepaid debit cards. Prepaid debit cards are easily activated and work similarly to regular debit cards but don’t require a checking account.

You can find prepaid debit cards at financial institutions or grocery stores, where you can load them with a cash or check deposit. Be mindful of sign-up fees, monthly fees, and reload fees.

A gift card can serve a similar purpose, but its use will be limited to the store or retailer you purchase from.

Money transfer services

Money transfers

Western Union is a popular money transfer service with more than 42,000 centers across the U.S. and 500,000 locations worldwide. You can send a payment online or through the app, and your recipient can pick up the money at a physical location. 

There is a $3,000 transaction limit, which increases to $50,000 if you verify your identity online or in person. Western Union fees depend on your payment method (bank account, a Western Union location, or credit card) and the recipient’s location.

Money orders

It’s ill-advised to send cash through the mail. Consider a money order instead, which you can purchase with cash and issue to a specific recipient.

Money orders can be purchased from a financial institution or store. There’s usually a purchase limit of $1,000 and a fee under $5. 

Tips for sending money to someone without a bank account

When sending money to someone without a bank account, Marguerita Cheng, CFP® professional, RICP, and CEO of Blue Ocean Global Wealth, suggests comparing different options to find the best for your situation.

“You have to think about, do you want the fastest, do you want the cheapest, or do you want the safest?” explains Cheng. “Sometimes, if it’s speedy, it’s gonna cost more. But you also don’t want to compromise on security.”

If you are sending money abroad, Cheng says you’ll want to make sure that you protect yourself and treat security as a top priority. Understand, for example, whether the money will be returned to you if “for whatever reason” it can’t be collected by the person you’re sending it to, she says.

You’ll also want to confirm that your recipient will be the person picking up and cashing in the payment. They may not be able to receive the payment if another person’s name is on it or a nickname is used.

Additional resources for unbanked populations

The 2021 FDIC study found that the top reasons people do not own a bank account are distrust of banks or concern about meeting minimum balance requirements.

If you’d also like to help an unbanked person find a bank account, here are a few resources you may share:

• Bank On certified accounts: A Bank On certified account has a minimum opening deposit under $25, low monthly services, and no overdraft fees. 
• Second chance banking: Second chance bank accounts do not review a person’s past banking history. These accounts have easy opening requirements and minimal bank fees because they are specifically for people who have struggled to open accounts due to their previous banking history.
• Minority depository institutions: These banks and credit unions often notably serve low-income and underserved groups.
• Community development financial institutions: Community development financial institutions are credit unions, banks, or non-profit organizations that also serve low-income and underserved communities.
• Juntos Avanzamos designated institutions: These institutions allow you to open a bank account without a U.S. ID. For example, you may use a foreign passport or Matricula Consular instead.

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