Ask Sindie: What's the best way to transmit money overseas?

Registered post didn't deliver, so a reader asks about electronic services

Q: I have been sending money for two years to a Croatian refugee from the war in the former Yugoslavia. She is now in Holland and studying to be a chemist.

I have been using Royal Mail registered post, but on two occasions recently the deliveries have not arrived. So I have had to send the cash by ordinary mail in several letters as she needs it promptly.

After a long wait, I have been refunded the lost money by Royal Mail.

My friend has no bank account but her landlord is willing for her to use his. Occasionally, I have sent money by electronic mail to his account but I need to know the cheapest way of doing this.

RD, Bournemouth

A: Cost is always a problem for those who want to send small amounts overseas - particularly to people without bank accounts.

Putting cash in the post is obviously both expensive, in terms of the insurance you need to buy, and risky. And, as you have found, reclaiming lost funds can be a laborious business.

The orthodox way of sending cash abroad is to use one of the two main money-transfer organisations, Western Union and Moneygram. But they are very expensive, charging £12 to send just £50. On the plus side, though, the funds do arrive in minutes.

You don't say which electronic service you have used in the past, but the best-known one is Paypal.

Paying in is free, and withdrawals from the Paypal account into a bank account in the Netherlands cost 3.4 per cent of the sum sent plus €0.35 (roughly 20p) for up to £1,500.

Another foreign transaction service you might consider is www.moneybookers.com. The system works in a similar way to Paypal: you set up an online account and transfer the funds to a Moneybookers account before they are transferred on to the receiving bank account.

The service charge is 1 per cent with a maximum fee of just €0.50. Receiving money in another Moneybookers account is free but the account holder at the other end - in this case the landlord - will pay a €1.80 flat fee to transfer the cash into his bank account.

Moneybookers is a remarkably cheap service. The firm makes its margins on the exchange rate but to no greater extent than all other money-transmission services, which charge higher fees on top.

If you want to avoid using your friend's landlord, there are a couple of other options. The first of these cannot be officially recommended so you use it at your own risk. On the plus side, it is cheap.

The idea is that you open a Nationwide FlexAccount, an ordinary current account which gives you a debit card that can be used in shops or to draw money from an ATM in the UK or abroad.

This is the cheapest debit card for overseas use as it does not charge exchange-rate loading. You could pay money into your Nationwide account, then pass the card to your friend in the Netherlands and tell her the PIN, so she could withdraw cash from Dutch ATMs. You will have to trust your friend completely, and be sure she knows when the account has cash in it, so you don't go overdrawn.

Another option is a prepaid card or "electronic traveller's cheque" card, available from banks, travel agents and some shops. You can get these either with a fixed amount of cash (often known as "gift cards") or you can "load" them with a sum of your choosing. When the initial amount has been spent, you can top the card up again, either in person at the bank or remotely by phone or over the internet.

For your purposes, you'll need a card that you can top up remotely.

Among the most versatile pieces of plastic is the American Express Traveller's Cheque Card, which can be reloaded with additional funds free of charge, online or by telephone.

The initial cost of the card is £20 and you will need to put in £200 to get the ball rolling, but once it is loaded, it can be used in ATMs to withdraw up to £250 a day or the equivalent in US dollars or euros.

You can also use the card to purchase goods and services in shops, hotels and restaurants, provided you have funds remaining on the card and subject to a 2.73 per cent fee.

If you need help from our consumer champion, write to Annie Shaw at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email sindie@independent.co.uk. We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given