Cheapest Way to Transfer Money Internationally

Alon Rajic
Last Edited Nov 01, 2023

6 Ways to Transfer: Which is Cost Effective?

Over 10 trillion dollars are transferred internationally every year, and for private customers and small businesses,

The cost of transfers is lower than it was before across the board, but still high.

Banks charge as much as x3 or x4 than alternatives. Let alone online eWallets like PayPal charging as much as x2 as banks do.

Then you have some remittance companies….

On which UN chairman Kofi Annan once said are  “unethically expensive”.

Customers are desperately looking for cheap ways for international transfers.

But at the same time, are looking at other crucial factors like the safety of their funds and quality of service.

So do we.


To facilitate that – an entire industry of international money transfer service  providers has been growing over the course of the past 10-20 years at a staggering pace.

The entire industry is based on the concept of offering a cheaper alternative to banks.

Wise is a £10bn company built around this very ethos – offering customers a no frills and simple online money transfer system facilitating cheap international money transfers with a great level of convenience and at high speed (that is in spite of constant increases YoY in some currency routes).

We have reviewed 90+ companies in total offering that very service (with sometimes major differences between those providers, designated at different intents and corridors).

We have also delved into a comprehensive research geared at deciphering bank fees forinternational transfers across the UK, USA, Australia, Canada, South Africa, New Zealand and the EU.

There are dozens of services claiming to be the most cost effective…

Almost all of them are cheaper than banks (but not all).

But which is the cheapest, and does cheapest always means best?

What is The Cheapest Way to Transfer Money Internationally?

The cheapest way to transfer money internationally, based on our comprehensive research as as follows:

1. For large amounts: a currency broker. Currency brokers are offering a combination of bespoke and personalised service alongside preferential rates and the ability to hedge payments.

2. For medium or small amounts: a non-bank money transfer online service. Digital providers offer advanced online money transfer systems, low fees, and often offer a multi-currency account that enables you to also hold funds in foreign currency.

3. For immediate transfer and remittances: Wise account (to a recipient who also has a large amount).

💵 How much money can you save?

Bank fees for international transfers average at 2.5%-3% in UK, USA, Canada and Australia.

Depending on the currencies involved, your transfer could be as much as 90% cheaper with margins as low as 0.25-0.3% for large transfers between major currencies.

Does Cheapest Mean Best When Sending Money Internationally?

While the two concepts (cheap and best) are heavily correlated when it comes to money transfers, price is meaningful but isn’t everything.

Most consumers believe that cheap could also signify lower quality products, and there is an actual merit to this claim because when money transfer companies try to slash their own costs they also willingly give up on certain aspects of their business.

For example, the aforementioned Wise – which is considered one of the cheapest ways to transfer money internationally today – does not have a dedicated currency dealer function.

This is something that competing currency brokers do offer.

Such Wise competitors may be not as cheap when it comes to offering the better exchange rate but through their premium service they improve other aspects of the transfer, such as:

Timing: guiding on the correct time to trade when rate may be more favourable.

Avoiding recipient bank fees: advise ahead of time if there are any recipient bank fees and circumvent them if possible.

Offering non-spot products such as Forwards (to lock today’s rate for the future).

And ultimately, given that a transfer would justify that, they could adjust their margins so that they beat competitors like Wise.

Through the Foreign Exchange Maze: Table of Contents

💵 How much money can you save by using a non-bank provider?

What are the costs of a bank transfer?

1. Wire fees

The first type of fee applied by banks all over the world is the direct payment fee.

It’s usually quite visible how much is charged here and the fee is usually fixed.

It normally depends on where you’re sending money from and where you’re sending it to.

SEPA transfers are known for being a cheap method of sending money within the EU, whilst SWIFT transfers to the rest-of-world generally attract a higher fixed payment fee.

Looking at each country, wire fees can fall anywhere in the price range below:

Banks inSWIFT Bank Fees (Wire)

When it comes to smaller transfers, these fixed fees will make sure that using your bank is NOT going to be the most suitable option for smaller transfers.

For example with an American bank, if may pay as much as $50 in wire fees.

That’s 5% of a medium-sized transfer of $1,000 and as much as 50% if you are just looking to send $100 to someone abroad.

Currency Brokers and Digital Money Transfer Companies aren’t charging any fixed fees per transfer (but have clear minimum transfer amount stipulated).

2. Hidden fees in the form of exchange rates

What makes for a cheap international money transfer, to a much greater extent than fixed fees, is the cost embedded into the exchange rate.

What this means is that banks are charging an invisible fee off of each transaction involving foreign currency

For example, if you transfer money from the UK in Pound Sterling to France in Europe, there is an added cost of exchanging GBP to EUR (for example when transferring from UK to Spain) which can amount to several percentage points of each transfer.

Our analysis found banks are charging anywhere between:

Banks inExchange Rate Markup

We’ve all been at the airport and noticed how much worse the exchange rate is at a bureau de change compared to what we see on google.

The same applies for bank-to-bank transfers.

The only difference is that with a bank you may be exchanging tens or hundreds of thousands so the overall fee can amount to an incredible amount.

Impact of Currency Fluctuations

Currency fluctuations are the wild card in the international money transfer game.

They’re influenced by a myriad of economic factors, from inflation rates to political stability.

If the exchange rate shifts unfavorably, your transfer could end up costing more than you planned.

But fear not.

By keeping a keen eye on exchange rates and market trends, or utilizing tools like Rate Alerts from money transfer services, you can time your transfer optimally.

Conclusion: you could end up paying 8% on a transfer 👻

If you are transferring money from Australia, say A$1,000, and paying A$30 in fixed fees on top of a 4.58% margin, you end up paying more than 7.5% of the money you transferred in bank fees.

That’s before we have factored in components like intermediary bank fees which can eat up to a few more percentages.

Is there such a thing as free international money transfers?

There is no such thing as a free international money transfer.

Like anything in the world, there are costs to provide the service and there are costs to use the service.

One of the best ways to understand how much we should be paying for an international money transfer is to understand how international money transfer providers and banks make money.

How do Banks and Money Transfer Firms Make Money?

When banks trade FX with each other they do so at the interbank foreign exchange rate.

This is the true exchange rate that you’ll find when you google a particular currency pair.

Most people wonder if banks can trade at the interbank exchange rate with each other then why am I not eligible for this rate?

The truth is it’s a bit like everything.

To provide FX as a service is costly – technology, compliance and staff are just a few of the costs involved.

It’s impossible for money transfer firms to offer the interbank exchange rate whilst encountering these costs.

If they did, they would soon go out of business. For this reason, customers should expect to encounter some sort of FX spread in their transaction.

That being said, it doesn’t need to be an extortionate spread that is so often applied by banks and some money transfer brokerages.

In case you’re wondering why banks are able to trade at the interbank exchange rate with each other – all banks incur similar costs to provide foreign exchange so they are happy to waive these costs when trading with each other.

Commonly, at the close of play on each business day, you will find banks trading currencies with each other depending on their customer deposits and the currencies they are long and short in.

You can easily calculate the spread you are being charged, as follows:

(Interbank Rate – Rate Offered / Interbank Rate) x 100 = FX Spread

Are financial promotions about fee money transfers bogus?

Financial promotions and adverts are normally the most regular contact consumers have with the products offered by financial services companies.

The adverts can be across any medium, whether offline like billboards and direct mail or online like websites, social media posts and mobile apps. These ads can provide valuable insight into a firm’s culture and conduct

The FCA regulates advertising for most financial services and this includes products like money transfers and e-money.

This is why you will find many payment companies offering “fee-free international transfers” but never “free international transfers” – the latter would technically be misleading.

If you are concerned a payment provider has a misleading ad, you can contact the FCA here.

The Advertising Standards Authority (ASA) may also get involved, depending on the nature of the complaint.

What should my expectations be for a cheap overseas money transfer?

Realistically, the concept of a cheap way to send money overseas heavily depends on two factors – the currencies involved and the volume.

For business customers who are using a business foreign exchange service to move millions each month, a cheap transfer may mean no fees and a markup of ~0.2% of each transfer (x10 cheaper than the average bank markup).

For private customers transferring money to exotic currencies at a small volume in a one off transaction, a total cost of 1% may be the cheapest money transfer they could achieve which still represents potential savings of 60% or 70% compared to banks.

1. Bank Transfers

Direct international transfers via banks are convenient but expensive. Even the cheapest options, like Nationwide in the UK or Bank of America in the US, charge around 2% or more per transfer.

2. Same-Currency Transfers

Sending money in the same currency through your bank can be cheaper, with only wire fees averaging £15 in the UK or $20 in the US to bear. However, the recipient must agree to receive funds in a foreign currency.

3. Card Payments

Card payments are viable for business transactions. Charges are low when paying in local currency, but foreign currency exchanges through card issuers can cost between 2.5% and 4%.

4. Cryptocurrency Transfers

Crypto transfers avoid currency exchange fees, but are not yet mainstream for cheap wire transfers. Platforms like Coinbase and charge up to 4.5% and 3% respectively, and cryptocurrencies’ volatility is a concern.

5. Online Transfer Services and P2P

Online services like Wise, Remitly, and OFX offer competitive rates, making international transfers cheaper. Innovative models like Currency Fair’s P2P and Sokin’s subscription-based service, along with neobanks like Revolut and Monese, provide even cheaper alternatives, depending on the situation. Wise, being the most prominent digital provider, has set its margins on approximately 0.5% markup.

6. Currency Brokers

Currency brokers are ideal for large transfers, offering competitive rates and expert guidance on forex markets. They often beat online transfer services on larger trades and provide additional tools to optimize rates. Currency brokers can charge anywhere between 0.1% and 2% in exchange rate markups, but most commonly between 0.4% and 1%.

Top 3 Brokerages

Currencies Direct
  • Min Transfer: £/€/$ 100
  • Currencies Supported: 39
  • Offices : UK, EU, USA, India, South Africa.
  • Our Rating : 97.8%
  • Most Global Offices and Reach

    No Fees from Anywhere and Competitive Rates

    96% Client Satisfaction
  • Min Transfer: £/€ 100
  • Currencies Supported: 40
  • Offices : UK, EU, Singapore, and Australia.
  • Our Rating : 93.4%
  • High Quality Bespoke Service

    MoneyFact's Best Provider Award

    Over 100 Years of FX Experience Across Its Trading Desk
  • Min Transfer: £/€/$ 50
  • Currencies Supported: 120
  • Offices : UK, EU, USA, HK, and UAE.
  • Our Rating : 92.8%
  • Business Oriented, Many High Profile Business Customers

    Industry Veteran since 1979

    Diverse Hedging Options and Excellent Guidance

Concluding words – the cheapest ways to send money internationally

Based on our overview above, you will see that the cheapest ways to transfer money internationally are:

  1. Making same currency payments through your bank (if your recipient agrees)
  2. Currency brokers (for high value transfers)
  3. Online money transfer specialists offering low fees or premium subscription models that make international money transfers almost free (for lower value transfers)

Each of those methods will save you anywhere between 60% and 95% of your transfer costs as compared to the most expensive ways being

  1. Using your bank to make a transfer abroad that includes a currency exchange (2-4%)
  2. Using an online eWallet function like PayPal (up to 5%).

Articles you might be interested in:

Free International Money Transfers – Do they exist?

Discover cost-effective ways to transfer money internationally, debunking the notion of free transfers and explaining how banks and money transfer firms profit. Popular methods of sending money abroad and evaluating their cost-effectiveness.

International Money Transfer Fees

Uncover the varying fees and costs among major banks in the UK, Europe, USA, Australia, and other countries. Highlighting disparities within the same country, the article emphasizes the impact of hidden FX markups on total transfer costs.

Non Sterling Transaction Fees Explained & How to Avoid Them

Explore non-sterling transaction fees, understanding what they are, when charged, and how to avoid them. Compare fees from major UK banks to cheaper challenger banks and fintechs. Learn about the best currency accounts/cards, calculate non-GBP transfer fees, and get tips on using cards abroad.

How to Avoid Intermediary and Beneficiary Bank Fees?

Discover how to avoid recipient bank fees in international money transfers. Understand the role of intermediary banks and their potential fees. Explore solutions like currency brokers or transfer providers to bypass SWIFT transfers. Learn about the differences between domestic and international payments and how SEPA and SWIFT networks work.

International Money Transfer Fee Calculator

Navigate the complexities of international money transfer fees with a user-friendly calculator that compares costs between banks and top online transfer services, highlighting potential savings with detailed disclaimers for transparency.

Best Exchange Rates for Bank Transfers

Uncover the nuances between official interbank and private/corporate exchange rates, learn about spreads, markups, and factors influencing rates. Understand the perks of currency brokers and online money transfer platforms, how to get the best rates, make currency predictions, use hedging tools, and understand the impact of global events on currency volatility.