📖 A beginner`s guide to receiving money from abroad
When you need to receive money from abroad, it can be even more confusing than sending money.
With sending money, you take the active role, and when you receive it, you oftentimes rely on others.
When you get paid and the funds are transferred to Pound or your local currency, you will often end up with a different amount than what you envisioned.
That is due to:
a. Receiving wire fees.
b. Intermediate bank fees (known amount).
c. Currency exchange markup (the most important factor when receiving large sums).
To top it off, there are often complexities associated with inbound transfers.
Payers get their details wrong, or are simply afraid of sending internationally.
Banks are hardly ever responsive in real-time when it comes to the status of an incoming transfer which may be withheld for days or WEEKS by the bank until it enters the right account.
Whichever reason led you to search for a better way will be addressed by me in this guide, sharing my knowledge and experience over the 10+ years I have been running Money Transfer Comparison (the website you’re on).
The basics: know your banks details
Whichever way you would want to receive money from an overseas bank account, you would have to supply your own banking details.
Most proper banks would have print-ready versions of all the relevant details you would need to supply but, sometimes, they don’t.
You have to include your :
Full legal name
Bank branch and address
Bank’s IBAN, SWIFT, Routing
Mention what to write on the message so that the bank and you could identify it
Furthermore, it would be smart to contact your bank or provider AHEAD of an incoming transfer, and let them know you are about to receive money. They may want to ask more questions and it’s better done before the money is sent and withheld with your bank.
Get familiarised with the type of service you’re looking for
There are several types of ways to receive money from abroad.
- Digital providers.
- Currency brokers.
- Cash (hand to hand, or pick-up).
- The likes of Paypal.
To, each, there is a specific use case in which it’s the best way of receiving funds.
Currency brokers are the best options for those who want to receive larger sums and/or simply look for a very bespoke type of service during this what-could-be unnerving process. Then of course, they offer a substantial cost-saving to banks by offering better exchange rates, no incoming wire fees, and with most corridors – no recipient bank fees.
Digital providers are the cheapest for sending smaller sums, but very few of them will allow you to receive money through them. Wise is one example of a digital provider offering a multi-currency account: a named account (on your name) which enables you to receive money locally in multiple countries (and then exchange to Pound, Euro, dollar or one of 60+ currencies and withdraw the funds back to your home bank).
Banks are the most convenient option in a sense, because you already have a bank account.
In some cases, banks would be the cheapest option to receive money – but that would only be the case if the transfer remains domestic and done in the same currency.
So, if the person sending you the money happen to have a local account in local currency, you should definitely opt for that option.
The problem is that this will very rarely happen, and you would have to receive money internationally…
Paying 2-3-4% per transfer, in addition to fixed fees (for example in the U.S, it would cost you $15 to receive an international wire transfer).
Ewallets like PayPal offer a super convenient way to receive money and it’s also instantaneous.
The issue is that the fees are even higher than the one by banks.
It will cost you approximately 2% to receive money through Good & Services.
And then as much as 5% to make the currency exchange.
PayPal is probably the worst way to receive money internationally, if you are concerned about the fees at all.
Cash is also ill-recommended when it comes to receiving money.
First off, most parcel companies will refuse to send money in a parcel.
Secondly, when people send money to someone through this method, it is often identified by courier employees and stolen.
Even if someone comes physically to deliver you cash, you would have to keep in mind that this person would have to declare £10,000 and up or equivalent when entering the country (otherwise, he will committing a felony).
Then, as a part of the FCA’s fight against money laundering they also limit its usage.
The only advantage is that if the cash delivered to you is in local currencies, it means that the other party has paid for the currency exchange fees and you’ll get the net amount.
But still, not a good idea.
Agreeing on rates ahead of the transfer
It should be noted that some brokers will try to attempt something like that:
After you have registered with them, they will supply the payment details for the other party to make (say you need to be paid in USD and they will supply a USD bank account details for the other party to pay).
Then, after receiving the funds and holding them, they will exchange the funds at a rate that is not favourable to you because nothing was pre-agreed with them and they can apply the “default spread” to your transfer.
It would still be cheaper to receive with that rate than a bank’s rate, but it is much more preferable to agree on a rate or a spread to be applied ahead of the transfer where you have some leeway and if you don’t like the price, you could continue to shop around.
Not pre-agreeing on a spread puts you in a “captive customer” type of situation.
Typically for Money Transfer Comparison, our audience consist of most Brits, and Brits abroad, who have larger requirements, and are looking for a cheaper non-bank option to send or receive money from overseas. These are our most popular corridors:
Sending Money From / To
View all routes on our sending money abroad guide
How does the process work?
If you want to use a non-bank provider to receive an international payment, you’ll need to register with one.
Registering is normally hassle-free and quick, done only with revolutionary technology.
Once they have authorised you to trade, then you could book a trade (transfer) or receive one.
It’s best to call your broker up and explain the situation, who is paying you, from where, which currencies and amounts to get guidance on the best way to do it, and have someone help you along the way. If your transfer is higher than £5,000 then most brokers would provide you with an account manager whom you could speak to exclusively.
They can guide on splitting payments to trenches, where to receive them, which bank details to use, have a look at the SWIFT to verify the details are correct, and so forth.
How much can you receive?
If you are receiving money from overseas from a UK bank account, there is no limit.
Whether you are using a high street bank, a neobank, or currency specialist, there’s generally no issue when receiving larger sums.
Currency specialists are actually very much used to that, with a lot of their transfers relating to property or inheritance from abroad which could be in the millions.
It’s best to your broker or bank about that prior to sending your details through – just to verify there would be no issues after the money has arrived.
When is a multi-currency account my best bet?
A multi-currency account is essentially a virtual named account that you would get in multiple countries and currencies after registering with some providers.
Wise is one of the biggest and most famous multi-currency accounts in the world with features like a debit card and an average of just 0.5% on currency exchange.
Revolut is Wise’s biggest competitor offering about the same functions PLUS access to investing those funds.
OFX is another money transfer giant which is publicly traded in Australia and have been around for more than 25 years with a very complete multi-currency offering (but the OFX multi-currency is for professionals and businesses only, not for personal usage).
Payoneer is one of the world’s first B2B multi-currency accounts which started off being very focused on freelancers and is now more geared at higher volume b2b transfers.
How it works
It’s as simple as that – you get those accounts AUTOMATICALLY upon signing up to your online account. Simply click on a currency and you’ll see your own account details in those currencies.
Then, you can store it, use it, exchange it to any other currency or in Wise’s case even invest it.
When to use it to receive money
Multi-currency accounts are hands down the best option for small businesses which get frequently paid from abroad.
It is also the best option for someone who constantly receives and sends foreign currency payments (that person can store payments coming in FX and exchange them in the provider’s system to make payments as well – a very seamless experience).
The issues with digital providers as a whole, including those issuing the multi-currency account is service.
If you have about to receive a significant amount then you might want to have someone looking after you rather than a support number to call and ask.
It will also reduce the chance of delay in payments, money being withheld etc which is one of the most common complaints about Wise and Revolut.
(OFX and WorldFirst are semi-digital semi-broker hybrid so they do provide the bespoke guidance)
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