Sending money abroad can be costly, slow and frustrating, the UK's Department of International Development has said.
Small amounts of cash can be a lifeline for family members abroad
It found that rates varied from £2.50 to £40 for sending just £100 during a mystery shopping investigation.
The department is calling for major improvements in the system to encourage competition and reduce consumer costs.
Low income customers regularly sending small amounts to dependants abroad are at a particular disadvantage, it added.
The report said that while many individual transactions may be small, the business itself is huge.
Global transactions add up to £40bn a year - more than developing countries receive in international aid.
Regular payments, however small, to dependants abroad "are very important for the livelihoods of families in developing countries - contributing to half of a household budget and paying for health, education, food, consumer goods and housing", said International Development Minister Gareth Thomas.
The department hopes that by publishing a table of its findings on its web site Sendmoneyhome.org and distributing half a million leaflets through community centres, it will provide the information needed for regular users to get a better deal.
The information could also benefit others who have a one-off need to send money abroad - whether buying a second home or dealing with a crisis whilst travelling on business or on holiday.
It also hopes that once banks and building societies recognise the potential for expansion in the market, their systems will become better adapted to consumer needs.
In general, the survey found that High Street banks and building societies were more expensive and slower at sending small amounts than money transfer operators.
Transfers through banks took between two and 10 days, whereas money transfer operators frequently took less than 24 hours - in some cases less than 10 minutes.
Banks also tend to have shorter opening hours, require the receiver to have an appropriate bank account and staff were less familiar with procedures used than those employed by specialist transfer providers.
On the other hand, customers often tended to trust the banks and building societies more.
The report recommended improving the service by:
- avoiding minimum charges that can penalise the transfer of small amounts
- making transfers easier through use of automated cash machines at home and abroad as well as improved links with post offices
- training office staff in UK banks to deal with the process and improve provider websites
- providing free confirmation that the money has arrived at its destination.
The British Bankers' Association (BBA) welcomed the report as a useful compilation of relevant information, but said many banks charge a flat rate fee that can make it cheaper when sending larger amounts of money than providers who levy a percentage.
"The important thing above all is that the priority for consumers is security rather than price and speed," said BBA spokesman Brian Capon.
"Banks provide that security and are fully regulated by the Financial Services Authority.
"They also often have wide distribution networks and arrangements with other foreign banks in the receiving countries".