Our UK currency broker guide will help you understand which are the best brokers, which services are they actually offering, and whether it’s cheaper to use a brokerage than a bank. On MoneyTransferComparison, we have been comparing various money transfer methods including currency brokers since 2014 and have reviewed 80+ providers to date; of which, 20+ would fit under the definition of a UK-based foreign exchange broker.
Best Currency Brokers in UK – Top 7 – June 2023
Functions offered: ✅Overseas Payments;✅ Receive Funds from Abroad;✅ Exchange FX Between Owned Accounts;✅ Foreign Exchange Hedge;✅ Expert Guidance;✅ Multi-Currency Fund Holding
Best UK Currency Broker for 2023 (Overall Rating)
- Large Transfers and Bespoke Service Specialists with 4.5/5 Rating on TrustPilot (5,000+ Reviews)
- Industry Leader with £10bn in Annual Turnover
- Most Global Offices in the Industry
Friendliest Currency Brokerage in the Industry
- Personal, Friendly Service - Based in Cornwall with 100+ In-House Traders
- 95% Satisfaction from Past Customers
- Regular Market Updates
Moneycorp: Foreign Exchange Powerhouse, Business FX Specialists
- Operating Since 1970 - First Commercial FX Firm
- Corporate FX and Hedging Specialists
- Most Consumer and Business Awards in The Industry
Global Reach Group: 99% Positive Client Feedback
- 99% of its Past Clients Gave the Firm a Positive Review
- Strong Global Reach with Offices in UK, Europe, and Canada
- More than Two Decades of Experience
Key Currency: Best NEW Currency Brokers for 2023
- Fastest Growing UK Currency Transfer Provider
- Strong Onboard Team, Get an Immediate Callback
- Recepient of Multiple Industry Awards
Excellent Online System, APAC Payment Specialists
- Traded Publicly
- £20bn Turnover per Year
- Ultra Professional
Halo Financial: Excellent Online Platform and Support
- Feefo 2020 Platinum Trusted Provider
- Excellent Website and Online Flow
- Highly Professional
But, Wait –
What is a currency broker?
A currency broker is a type of a foreign exchange company. A currency brokerage exchanges currencies on behalf of its customers, whether that’s between a customer’s own accounts or transferring money internationally to a third party. It’s this ability to physically move money from one account to another which differentiates a currency broker, also known in the UK as a money transfer company, from a forex broker.
A currency broker is not to be confused with a forex trading broker and does not allow speculative trading. Currency brokers are regulated to transfer funds on behalf of customers by the FCA. They are considered a brokerage as they act as the ‘middleman’ between a customer and the bank. They are able to purchase currency from banks at ‘wholesale rates’ which are cheaper than if a customer went directly to a bank.
| Currency Broker | Forex Trading Broker | |
|---|---|---|
| Description | A currency broker helps customers exchange currency at wholesale rates, make international payments and hedge against currency movements. | Forex Trading brokers enables customers to trade currencies with high leverage through CFD (Contract For Difference). |
| Why use them? | Currency brokers are used to facilitate foreign currency payments, receive money in forein currency, and/or manage FX risk for businesses. | Individuals who trade with a Forex Broker intend to profit through speculative trading. |
| Is leverage offered? | Currency brokers don’t offer leveraged trading. An exception to that is that some brokers offer businesses access to FX options which is a leveraged product. | CFDs are leveraged products. Some forex trader offer currency trading at a leverage of up to 1:800. |
| Speculative trading? | Speculative trading is not allowed with a currency broker. | Speculative trading is the exact reason to trade with a forex broker. |
| Additional assets? | Currency brokers will only buy and sell currencies. | Most forex brokers offer CFDs on a variety of other products such as indices, bonds, cryptocurrency and commodities. |
| How does it make money? | Currency brokers make money on the spread (the margin added to the cost of currency compared to the inter-bank rates). | Forex brokers make money on each position opened through direct fees, spreads, daily fees and/or directly trading against the customer. |
Compare Additional Currency Brokerages in UK
Money Transfer Comparison prides itself in the most extensive and comprehensive currency broker reviews as a leading way to transfer money internationally. To be able to provide truly comparative information, we have covered a significant number of UK currency brokers. These are some of the better-known ones that were not included in our best currency brokers list for June 2023.
Online Currency Transfer Expert
- Specialist in Online Transfers
- Processes £5bn a month
- Transfers Possible in a Few Clicks
- Huge Number of Positive Client Reviews
- Revolutionised the Industry
Highly Professional Currency Broker in its Early Days
- Powered by Currency Cloud - A Major Currency Transfers Platform
- Experienced Management Team
- Not Enough Client Reviews to Determine Quality of Service
- Full Online & Offline Trading Process
Founders Still With The UK Currency Broker
- Strong Client Testimonials
- Regular Transfers
- British Bank Awards Winner
- No Payment Fees
Simple Exchange from a Small Currency Broker
- Feefo Gold Trusted Provider
- Over 20 Years Experience
- Dedicated Account Manager
- Refer a Friend Scheme
Best Rated Small Currency Brokerage on MTC
- UK-based, UK-banked & UK Regulated
- Experienced Account Managers
- No Commission or Hidden Fees
- Privately Owned, Personal Business
Overseas Money Transfers & Travel Money
- 100+ Currencies
- Friendly, UK-based Customer Service
- Travel Money
- Multi-currency Card
Rated Excellent for Currency Exchange by Customers
- Great Option for European-Based Transfers
- Offices in Spain & Portugal
- Live Rates & Charts
- Excellent TrustPilot Reviews
Advanced International Payment Technologies
- Wide-range of Business Solutions
- Extensive Licensing & Regulation
- Technology Focus
- Handles Over 140 Currencies
International Transfers & Currency Cards
- Financial Times Award-winner
- Overseas Travel Card
- Make Payments Within Minutes
- Online Payments Capped at £100,000
Investing & International Payments - Not Just a Currency Broker
- Full-suite Financial Services Solution
- Designated Account Managers
- Financially Secure FTSE100 Company
- Bank-beating Exchange Rates
Long-standing Currency Broker & Global Payment Specialist
- Free Risk Management Consultation
- Customised Global Payment Solutions since 1979
- Corporate Solutions
- 24/7 Access to Online Platform
Innovative Solution Focused on Fast Payments
- Rated Excellent on TrustPilot
- Personal & Business Currency Services
- Regular Currency News
- Refer a Friend £50 Amazon Voucher
London-based Personalised Currency Brokerage
- Clients Always Have One Point of Contact
- Facilitates Large Transfers
- Award-winning Best Emerging Currency Brokerage
- Handles Complex Currency Transactions
Currency Broker With Institutional Clients
- Suitable for Investment Banks & Hedge Funds
- Almost 20 Years Experience
- Unique Solutions to Pay Countries in Africa
- Free Daily FX Reports
Cross-Border Currency Transfer and Immigration Specialist
- Forex, Tax & Accounting Advice
- Experienced in Immigration and Citizenship
- UK Currency Transfers
- UK, South Africa and Australia Focus
Husband and Wife Run Business
- No Payment Fees
- Customer-Focused
- Small, Family-Run Brokerage
- Immaculate Customer Reviews
Independent Brokerage Based in North of England
- Supporting Local Businesses in North of England
- Well Respected Founder
- Personal Service from Small Team
- Powered by Currency Cloud
Notes:
With the exception of Wise.com (previously TransferWise) who we feel deserves a mention, we have resisted including purely online money transfer companies on this page (another sub-type of foreign exchange companies). The same goes for remittance companies. We consider traditional currency brokers to be non-banking financial institutions that provide a wide array of currency hedging solutions paired with a team of dedicated FX experts with whom you can speak to in order to build your own personalised currency strategy. Currency brokers should be able to provide added value to your overseas money transfer and will be best suited to those who need to make one-off large transfers or frequent foreign exchange transfers.
2023 updates: Read our Sokin review to learn about the first UK currency broker to waive all fees in place for a monthly subscription. We don’t believe this type of business model can sustain in the long term and would not recommend jumping on the train before anyone else does, but it’s an interesting, share-worthy concept.
Should I use a currency broker?
If you have a requirement to send money internationally, or transfer one currency to another, then you should consider using a currency broker. There are a number of reasons why you should use a currency broker. Currency brokers provide bank-beating exchange rates and offer a tailored service which is built specifically for sending money internationally.
Individual guidance is given for each customer’s unique situation and brokers provide a range of currency hedging tools which can help to protect against exchange rate risk and provide more flexibility around the timing of your transfer.
Does a currency broker buy or sell?
Currency brokers will both buy and sell currencies on behalf of their customers. Different currency brokers buy and sell different currencies and it’s worth understanding what currencies a provider can handle prior to registering with them. As a general rule of thumb, the overwhelming majority of currency brokers will buy and sell most major currencies.
For an exotic currency, it’s worth investigating with a specific brokerage whether they can buy or sell it. In some instances, it might be that they are only able to sell an exotic currency and they may not necessarily buy it from you. If they do, it might be at a higher cost than trading a popular currency. Check with your broker.
How do currency brokers make money?
Currency brokers make most of their money from the exchange rate margin they apply to currency exchange. This is the difference between the rate they receive from the bank and the rate they provide their customer. Currency brokers can also make money from payment fees, though it’s quite common for brokers to waive these for personal customers.
The exchange rate margin is also sometimes referred to as the FX markup or FX spread. Despite applying this markup, the idea is that customers still achieve a better rate from a broker than if they went directly to the bank themselves. Brokers exchange high volumes of currency and receive lower ‘wholesale rates’ from banks, whilst individuals and SMEs receive more expensive ‘retail rates’. The FX markup is a not-so-evident cost which is factored into the exchange rate but it’s an important one to be aware of as it’s where most of the costs are incurred.
If payment fees are applied, it’s usually quite evident how much they are. Currency brokers usually provide fee-free international transfers or apply much lower payment fees than banks.
FAQ: What are currency brokers and how do they operate
+ How are currency brokers cheaper than banks?
+ Who is a typical client for a currency broker?
+ Can you fund international transfers through a debit card?
+ How do I book a transfer with a currency broker?
+ Do currency brokers offer hedging tools such as Forward Contracts?
+ Are there any transfer limits with currency brokers?
Find the Best Currency Brokers – Parameters
There is no one-size-fits-all approach to deciphering the best currency brokers and you should always determine your own selection criteria, based on what’s most important to you.
The concept of trust and security is, based on our market research, the most decisive factor for our target audience who are mostly interested in large-scale foreign exchange transactions. If you were to send an amount of £10,000 or more to a third party bank account belonging to a currency broker you want to know that the risks of that money disappearing or the transfer being delayed are close to none.
State of the art security and stellar reputation help prospective clients trust the service more than anything else.
Additional considerations are definitely applied when we create currency broker reviews. Our reviews are composed of the following parameters which are taken into consideration upon assigning ratings:
What are the fees? How are the currency rates?
Often difficult to accurately measure, as it’s a competitive market – most of the larger foreign currency specialists are going to have negotiable rates, the more foreign currency transferred, the better the rates (unlike bank international transfer fees which seldom allow customers to negotiate).
How diverse is its banking infrastructure?
Transfers are made easier and all intermediary fees are reduced when currency brokers have a good spread of local bank accounts in many countries. A local office is also important in terms of support and service – clients always like to be handled by locals, in local hours, with a physical office address to attend if needed.
Does it offer hedging tools?
For high-volume or repeating transactions, hedging (such as Forward Contracts) is oftentimes needed.
Can I trade online?
Brokers should have a functional and easy online platform to make transactions online.
Can I trade on mobile?
We prefer to see a functional and easy mobile application that can run on any mobile and enables users to send and receive foreign currency on the go.
Are other clients satisfied with the broker?
We aggregate all the client feedback we can find online to inspect whether clients are satisfied with the level of service and rates they have been given by the currency broker of choice.
Hence, our decision in regards to the best currency brokers is well-thought and dynamic. Always based on the most recent data we have for each company, as we continuously update our reviews, and compare the various broker options.
Foreign Exchange Brokers for Business: FX Management & Business Payments
Virtually all of the factors we have listed above to determine the best UK currency brokers apply when determining the best currency brokers for business. Aspects that are particularly important for businesses, who generally have more complex FX requirements, will be a wide-variety of hedging solutions and an appointed, experienced account manager. The best currency brokers for business will have a dedicated business team that are more familiar with batch payments, payroll and currency options. Products that private clients generally don’t require.
All of the brokers recommended in our top 7 UK currency brokers have dedicated business teams and business solutions. For this reason, these brokers on the whole, can also be regarded as the best currency brokers for business. Currencies Direct, Moneycorp and Global Reach also provide currency options – providing corporate clients with even greater hedging flexibility in the currency markets. Read our guide to business foreign exchange services here.
Foreign Currency Transfer Brokers – Not Just Online
One last point we need to flesh out with regards to currency brokers (and specifically the best foreign currency services) is that they offer multifaceted ways to move your currency to a bank account overseas, not just online. They should certainly boast a comprehensive online platform with many transfer options to choose from (which is available on mobile devices as well) but it should not be not limited to this, at all. Serious currency brokers have dedicated account managers who know clients by name and are able to provide real-time guidance on the timing of the trade, as well as perform trades entirely over the phone or via email.
This is particularly helpful for prospective clients who are not 100% confident in their ability to transfer large amounts of currency on their own through the online platform and fear they may mistype something or insert incorrect details, as well as small businesses and investors who aspire to improve their fx buying and selling strategy.
Why are Most UK Brokers Based in London?
Of all of the UK currency brokers listed on this page, 20 of the currency brokers are based in London. As the capital of the UK, one might naturally expect a higher concentration of currency brokers in London as you would any industry, but the history of finance and FX in the City of London goes a little deeper than that.
London’s role as the world’s centre of finance has long historical roots. By the end of the 19th century more than half of the world’s trade was conducted in pounds sterling but the main currency trading hubs in the early 20th century were actually Paris, New York and Berlin. London really started to regain its global presence in currency trading thanks to the relaxation of exchange controls in 1958. By the 1990’s London’s most significant revenue-earning function was to provide a centre for the international banking market. The unique collection of banks from all over the globe allowed for an exceptional range of currencies to be traded.
In 2019, according to data by the Bank for International Settlements (BIS), global daily trading of FX volumes peaked at $6.6 trillion (making it easily the largest financial market in the world) with London accounting for $2.86 trillion of this (the most of any city in the world by some fair distance). As of Jan 1 2023, there has still been no new data released by the BIS but the Bank of England continues to report on UK volumes.
COVID had an impact on FX volumes, but in the Bank of England’s most recent release (July 2022), it was confirmed London was still processing $3,27 trillion a day in April 2022 – a record survey high.
Whilst the usual reasons for being based in London would apply – its reputation as a business epicentre, the diverse and skilled workforce it attracts and the vast transport connections to the rest of the UK and the world – the fact it has a rich history of and is the current leader in global finance has made it a particularly popular choice of currency brokers in London. The same applies to the rise of FinTech’s joining the large number of currency brokers found in London.
Below you can find where major UK currency brokers are headquartered
| Company | Our Rating | Headquarters | Visit |
|---|---|---|---|
97.8% ⭐⭐⭐⭐⭐ | London | Visit Website | |
93.4% ⭐⭐⭐⭐⭐ | Cornwall | Visit Website | |
92.8% ⭐⭐⭐⭐⭐ | London | Visit Website | |
90.6% ⭐⭐⭐⭐⭐ | London | Visit Website | |
90.4% ⭐⭐⭐⭐⭐ | London | Visit Website | |
87.3% ⭐⭐⭐⭐ | London | Visit Website | |
82.1% ⭐⭐⭐ | Essex | Visit Website | |
81.1% ⭐⭐⭐ | Cornwall | Visit Website | |
80.1% ⭐⭐⭐ | London | Visit Website | |
80.0% ⭐⭐⭐ | London | Visit Website | |
78.0% ⭐⭐⭐ | London | Visit Link N/A | |
| N/A | Website not available | Visit Link N/A | |
71.0% ⭐⭐⭐ | Buckinghamshire | Visit Link N/A | |
| N/A | Hertfordshire | Visit Link N/A | |
| N/A | London | Visit Link N/A | |
| N/A | London | Visit Link N/A | |
| N/A | London (now being rebranded into Ebury) | Visit Link N/A | |
| N/A | Hertfordshire | Visit Link N/A | |
| kbr FX – kbr FX | N/A | Essex | Visit Link N/A |
| HiFX – Read Review | N/A | London, merged with XE money transfers | Visit Link N/A |
| N/A | London, but company ceased to exist | Visit Link N/A | |
| N/A | Buckinghamshire, UK | Visit Link N/A | |
| N/A | Leeds, UK | Visit Link N/A | |
| N/A | London, UK | Visit Link N/A |
Why is UK the Global Hub for Currency Brokers?
Across the world, big banks remain king of the currency markets. JPMorgan, Deutsche Bank and Citi trade the highest volumes with the majority of FX traded by financial institutions such as hedge funds and pension funds. Banks still remain the go-to option for large corporates and financial institutions as the volume in which these companies trade is so vast that banks offer competitive spreads and a huge variety of hedging solutions including forwards, swaps and options.
Small businesses and individuals however were (and still are) being mistreated by the banks, usually by being overcharged in international payment fees and extortionate FX spreads. As many of the major global banks were based in London it was ex-bank staff that identified the opportunity to fill a major whole in the market that their employers were not – providing a premium FX service to individuals and smaller corporates. Offering fair rates and a variety of hedging solutions to these clients too.
Most of the major UK currency brokers in London launched between the mid 90’s to mid 00’s when the barriers to entry were much lower than they are today – regulation in particular was softer, thus making it more accessible for entrepreneurs to launch a currency brokerage. With the UK gaining an early jump-start against other nations it has remained the global hub for currency brokers.
In the past, there’s no doubt firms would have been attracted to the UK by the EU ‘financial passporting’ rights as well. Leaving the EU and losing these rights has presented challenges for the UK but its reputation for world leading technology, regulation and security in financial services continues to comfort both currency brokers and their end clients. Though the Brexit transition period expired at the end of 2020, it would appear all of the currency brokers which had an HQ in London have maintained a UK headquarters and simply opened a subsidiary office in another European locale in order to offer their services to EU member states.
Can UK Currency Brokers Onboard non-UK Based Clients?
Until recently, when the UK was still a member of the EU, FX firms operating from the UK were able to offer international payment services to all EU member states. However, whilst the UK and EU were able to agree a trade deal just days before the 31 December 2020 Brexit deadline, an arrangement for financial services was not made. As a result, firms based in the UK lost access to the EU financial services ‘passport’. The EU passport gives financial services firms authorised in their home state the right to conduct business in the EEA based on their home state authorisations.
Virtually all of the major currency brokers in London, such as Currencies Direct, have a long history of working in Europe and hold at least one other European office (in Currencies Direct’s case in Spain), meaning they still gain access to the EU passport through their Spanish operations. . Few currency brokers were actually caught out by the move as it had been widely publicised that the EU and UK were unlikely to strike a financial services arrangement, so even the smaller currency brokers in London made adequate preparations and opened a European office specifically for the purpose of continuing to service EU-based clients.
Now that Britain has left the EU, being a currency broker in London or the UK gains no further rights to onboard clients from other jurisdictions. However, as many of the UK currency brokers in London are some of the largest currency brokers in the world, they often have an extensive global footprint allowing them to onboard non-UK based clients in many of the major territories around the world, including; Canada, USA, Australia and New Zealand. The firms then have to be regulated by the local regulatory bodies in those countries.
The nature of how the UK currency brokerage market has developed means different currency brokers have focused on different locales to expand their international footprint. To see where each of the UK currency brokers is best suited for transfers around the world see our best way to transfer money abroad page.
Signing Up with Currency Brokers is Easier from UK
Other than the regulatory limitations each currency broker has in onboarding customers from various jurisdictions in the world, there’s also a vast difference in the onboarding process (i.e. signing up with a broker) depending on where you live.
If you are a private client based in the UK, or a Brit based abroad who had dual citizenship and a valid home address in the UK, onboarding should be quite simple. Most brokers, and especially UK’s best currency brokers featured on this page, have 3rd party compliance tools that help them get customers from “enquiry” into an “authorised customer” instantly or almost instantly. You just have to send a few basic things:
- Your name.
- An ID including a photo, usually a passport or driving licence.
- Your residential address (with accompanying proof) and date of birth.
If you are signing up with a currency broker as a business then you should know that the process will be longer and more “tiresome” so to speak. More back and forth than you’d want, but not the worst situation either. You can finish your sign up with a good, responsive, currency brokerage, within a day or two.
These are the documents you will need to supply:
- The purpose of your transactions, i.e. are you paying staff, paying overseas suppliers, conducting FX for treasury purposes.
- Details of the type of business and industry you operate in.
- The source and origin of funds that’s used to settle your transfers.
- Copies of articles of association or, if applicable, recent and current financial statements instead.
- The expected level of trading that will take place, usually estimated volumes over a year.
- Identification and verification of 1-3 directors of the business and ultimate beneficial owners (known as UBOs – usually when they own over 25% of the business registering for an account).
If you are trying to sign up with a broker from OUTSIDE the UK, then you could expect some more back and forth. First off, brokerages, as noted before, are mostly headquartered in the UK. That means most of their staff is in the UK, and their industry knowledge is very Brit-centric. Similarly, the technology they have developed, or using 3rd party service providers for, is UK-focused.
So even if a currency brokerage is regulated in a certain area, there is normally a much smaller onboarding team with less technology to help them around, and at times – more stringent regulation that forces them to “dig deeper” in order to understand their customer.
To learn more about this aspect read about the KYC process.
How Many Currency Brokers Actually Exist in the UK?
Exactly how many currency brokers there are in the UK will depend a lot on your definition of a currency broker. For many this could include firms that allow retail trading and speculation on their platform – the likes of IG, CMC Markets and Saxo Bank. As we have previously highlighted our determination of a currency broker, that is relevant to MoneyTransferComparison.com, is a firm that allows bank-to-bank transfers. Currency brokers to us are distinct in that they do not offer speculative trading but rather currency exchange with payments. Also known as deliverable FX.
These companies’ selling point is that usually they can offer better exchange rates and cheaper payments than banks. Currency brokers differ from money transfer/remittance companies in that they generally offer higher-value services.
Back in 2006, it was estimated that in the UK 14% of currency transfers were made via currency brokers and foreign exchange companies. With no further studies conducted recently, it is estimated that this could be closer to 25% in 2022.
When currency brokers initially launched back in the 1990’s the only requirement for the firm was to be registered as a money transfer provider with HMRC. It wasn’t until the late 2000’s that regulation changed and firms were required to be either registered or authorised with the Financial Conduct Authority. Prior to this move there were literally hundreds of currency brokers in London and the UK but when the new regulations came in many of these firms either shut or were acquired by the larger currency brokers based in London.
A shift in how money transfer firms were treated by banks – HSBC ceased working with money transfer companies in the early 2010’s due to compliance issues of their own and Barclays closed a number of accounts it had with currency brokers and money transfer firms – meant even more were removed from the market. These days there is a good mix between regulation that protects customers and new entrants joining the market if they are able to carve out their own niche. We have listed 26 UK currency brokers on this page but we are sure there are many more smaller currency brokers offering bespoke and personal services to clients. We endeavour to continue our research and add new brokers to our site on a regular basis.
Are These all UK Currency Brokers?
Yes, our most recommended currency brokers are UK based.
However, due to their international footprint, they serve clients almost internationally. If you are in Australia, Canada, UAE, Singapore, HK or the EU – literally each of our most recommended currency brokers will be able to onboard you quickly and efficiently. If you are USA-based, then some specific UK currency brokers won’t accept you but there are plenty of companies who would. If you live outside of the aforementioned areas, a UK currency broker may not be able to serve your requirements.
Can You Negotiate Rates With Currency Brokers?
Yes, and we’d recommend that you do. Certainly when selecting a new currency broker, as well as conducting an annual comparison with your regular currency provider.
When registering with a new currency broker it’s worth comparing quotes from at least two currency brokerage companies. If you do, you’ll likely find that one currency broker is cheaper than the other and, if cost is the most important factor for your transfer, you can either opt for the provider offering you the best rate or you could even try and negotiate with the other broker to see if they will counter this offer with an improved rate. Some currency brokers, like Global Reach, offer a best exchange rate guarantee – prove to them that you’ve found a better quote for the same size transfer at the same time and Global Reach will guarantee to match it. If a broker decides to match or beat a rate you’ve found elsewhere they will likely ask you to share evidence of the rate offered. In this sense you can’t ‘cheat the game’ and in any case you’ll want to build a mutually trustworthy relationship with your broker. Treat them fairly and expect to be treated fairly in return. There are many costs that come with providing a currency broker service – bank fees, tech development and staffing just to name just a few – and currency brokers will themselves have to find a price point where their business can still turn a profit.
If you’ve been with a provider for a long time we’d also recommend comparing providers every year or so. Some currency brokerages, mainly small scale and lesser-known providers, engage in an activity known as ‘spreading out’. They may offer ultra-competitive margins on the initial one or two trades to gain your trust but then start to widen the margin they take on future trades with the assumption that you won’t check the FX margin applied. If a currency broker seems very aggressive to win your business at the outset and offers rates which seem ‘too good to be true’ then the chances are they’re more likely to engage in this sort of activity. By opting for recognised and well established brokerages like Currencies Direct and moneycorp you can also be sure to avoid these insincere tactics.
Whichever way you look at it, it pays to compare rates between multiple brokers to ensure you’re getting a fair deal that works for your budget and is sustainable for your provider.
Segregated & Safeguarded Bank Accounts: A Must for Any UK Broker
How can any customer trust an international currency provider to the extent they will fund a transfer of tens of thousands of pounds before it takes place? Do currency brokers earn interest on client money? What happens if the currency broker goes bust?
Currency specialists are regulated by the FCA as E-Money providers or Payment Institutions, and part of their licensing requires that all client accounts are segregated from the firm’s normal bank accounts.
These sub-accounts are owned by both the currency specialist and the client whose money is stored and these funds cannot be put to any use with the exception of transferring it to the clients’ requested destination. Under the provisions, these firms are not allowed to incur interest on client money. Legislation determines when client funds are segregated (kept separate from the firm’s own money) and when they are safeguarded (protected in the case of the firm going bust). Speak to your currency broker to learn more.
Words of caution by our Managing Director, Alon Rajic:
Not every company registered with the FCA is authorised by the FCA. With international currency transfers, companies not meeting a certain £ threshold can operate without “full” authorisation. Make sure the company you use is authorised as an E-Money or Payment Institution. When your funds are being temporarily held for the purpose of a payment your funds will be safeguarded and protected if the firm goes bust. This is not the case when you place a deposit for a forward contract or hold money in a digital account (the money will be segregated but not necessarily safeguarded) – check with your provider what their regulations are in these instances.
Additional Non-Brokerage Means to Move Money Abroad?
There is an abundance of banks, commercial companies, websites, and mobile applications that enable you to conduct foreign currency transfers across the internet. Some of them boast cheap money transfers with preferable rates, some of them pride themselves on the comfort and ease of transactions (for example Paypal), some offer a smooth mobile experience, and some rely on the fact they are reputable and big. On MoneyTransferComparison, we tried to cover the best of all worlds.
Below, you can find our different lists reflecting the different aspects of the international currency broker comparison we have been conducting over the past 5 years.
- Best business money transfer
- Best remittances providers
- Best online money transfer websites
- Best money transfer apps for mobile
- Best eWallets (like Paypal)
A company we have referred to frequently is Wise (formerly TransferWise). New fintechs such as Wise, with a totally digital focus, pose one of the biggest threats to traditional currency transfer brokers. Originally launched in 2010, the then TransferWise was a company with bold ambitions that you might not have thought possible. Fast forward to 2023 and Wise has firmly taken the international currency transfer industry by storm – boasting millions of customers and transferring billions of pounds every month, resulting in the highest value direct listing on the London Stock Exchange to date. Clearly, there is demand for a slick, cheap and digital-only offering.
The service, however, is generally favoured by individuals and freelancers (particularly the younger generation) with regular but smaller currency transfer requirements. Wise has not looked to expand into more complex FX solutions as they are well aware this requires a completely different business model to succeed (such as the dedicated account managers you are appointed with at specialist currency brokers). The benefit of disruptors like Wise? Traditional currency transfer brokers have had to take note – either by improving their online platform, tightening FX margins or further boosting their levels of service to add value to the process of transferring money abroad.
Currency Broker Model Stands up to Volatility
In October 2022, during one of the most volatile periods for GBP since Brexit, there was a short period where the online transfer provider Wise was unable to honour the exchange rate that customers saw online when agreeing to a trade. Instead, due to volatility, they had to apply the exchange rate at the time money was received.
Currency brokers, on the other hand, did not implement any special measures whatsoever. Clients were able to continue trading as normal and remain aware of the rate they would receive. When a customer books an fx deal with a currency broker, that brokerage books a deal for the exact same amount and value date with a bank as soon as their customer books the trade. The ‘wholesale rate’ the broker achieves means they can pass on the savings to their customer and offer a better exchange rate than if the customer went directly to the bank. Given that brokers match the exact trade their customers make with banks, at the same time the trade is made, it means it’s a low risk business model that works even in times of volatility.
One exception to this could be when clients book a trade out of market hours. It’s possible that a broker would apply a wider FX spread in the case of currency movements between the time the customer books the deal out-of-hours and when the broker makes the trade the following business day in their timezone.
Final Word – Compare Currency Brokers with MTC.com
If you want to stay up to date with the currency transfer industry in UK and constantly learn about new (and best) currency brokers, whether you’re a business or an individual, please check-in from time to time. The foreign currency industry is vibrant and there are new options all the time.