📖 A beginner`s guide to sending money overseasWhen you need to send money abroad, you oftentimes don’t have enough time to conduct a thorough research.
Most payments are immediate in nature.
Most banks capitalise on that by making money transfers expensive.
They sweep those costs under the rug by not presenting them in a sensible way that the layman could understand.
That’s how most global transfers are still done via banks.
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 the detail of who you’re sending money to
Before we delve into the nitty-gritty of finding the best way to to transfer, there is something shared for every bank-to-bank transfer with whichever provider –
You have the know the recipient account’s details.
These include the full legal name of the person or company. Its address.
The name of the bank.The bank’s address.
In addition to the above, you would often have to provide details about the nature of the transfer.
Specifically if it’s a large-sum transfer.
Get those details from the recipient, or if it’s an account owned by you, get those from your bank.
Get familiarised with the type of service you’re looking for
There are several types of ways to send money overseas.
Digital remittance providers.
And physical shops to transfer money from.
To, each, there is a specific use case in which it’s the best way of sending money.
Currency brokers are the best if you have a large amount of money to send (as many brokers’ minimum transfer would be £5,000 or equivalent), want the most bespoke type of service you can get your hands on, and you’re looking to save a lot of money against your bank. They are also the most suitable for business foreign exchange needs.
Digital providers are the cheapest for transfers of any size. You normally don’t have a minimum transfer amount, and you pay no fixed fees. These digital providers support a lot of corridors that banks may not, and some of them, especially the ones oriented towards transfers to third world countries, would offer other means of receiving the money such as cash pickup or mobile top-up.
Banks are the best if you don’t care about costs and service, and only care about comfort (and even that is questionable as many brokers and digital providers may offer better online system than banks). Essentially it’s the fact that you already have a bank account and don’t have to register with another company.
Physical shops that enable you to send money abroad are for the most part very expensive. If you are looking for your funds to hit a bank account abroad then there is no reason not to go online and find a cheaper digital provider to any destination around the globe. If you are looking for a bank-to-cash transfer, you may be limited with the providers you can choose (Western Union and Moneygram also have an online website which is significantly cheaper than exchanging at the shop). If you are looking to send cash for cash, then you are pretty much limited to those type of shops which are known to be exorbitant of the situation.
Prices can change over time
It should be noted that particularly with brokers, but also when it comes to digital providers and banks, the fees and rates you will be paying on your first transfer won’t necessarily stick.
Banks, digital providers, and brokers, can raise margins or add fees as they are always looking to increase profitability
Additionally, some providers like CurrencyFair have lower fees for the first 3 transfers by new users.
Lastly, brokers are known to increase spreads for existing customers.
This phenomena is called “honeymoon rates” i.e. they provided excellent rates to lure you, and then charge you bundles in the next occasions when you send money.
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 transfer money overseas. We have created specific guide for the most popular From and To destinations that could be more helpful than “generic guidance” in this case.
Sending Money From / To
View all routes on our sending money abroad guide
How does the process work?
If you have opted to use a non bank solution then you’ll first need to register with a provider. Whether a broker or a digital provider.
Register online in minutes and then submit any documents requested in order to verify your account.
You’ll then be able to book a trade either through their online system or (with brokers) by speaking to your appointed account manager.
It’s not just a case of inserting the recipient’s bank account number and accepting whatever exchange rate you are provided with.
One of the major benefits of working with a specialist is the access to a currency expert so we’d always recommend giving them a call.
In addition to bespoke guidance, you might even be able to negotiate a better rate too.
To fund your transaction you could use either a debit card or a direct local bank transfer using local currency, just be wary of any transfer limits associated with either your bank account or your debit card.
The funds you have transferred abroad will get to its receiving bank account abroad in foreign currency in the destination country (cash pick up and mobile wallets not supported).
How much can you send?
If you are transferring money 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 sending money abroad regardless of the amount.
Currency specialists are used to dealing with high-value transfers abroad, whereas neobanks might set their own transfer limits up to say £1m.
This isn’t enforced by the FCA, it’s simply their own internal policies that fit their business model.
High-street banks often impose daily limits on standard current accounts so you may need to seek approval from your bank before you can transfer a large sum internationally.
How long will the transfer take?
The good news are that using a money transfer service isn’t any slower than banks.
The bad news are that they are not faster in any sense. They are making the actual transfer though banks, which means they have the exact same limitations.
There are 5 factors impacting how long it will take a wire transfer to get to a bank account abroad:
- Destination country.
- Sender’s country.
- Banks/international money transfer services involved.
- Whether there is an intermediary bank involved.
- In what time of the day the transfer was initiated (and what day of the week).
Most international money transfers go through a payment system called SWIFT.
This is what we are going to discuss below.
Some international payments within Europe can go through SEPA which is a separate, faster system, but it’s only applicable for 36 countries, most of which use the Euro.
Between which countries?
There are differences between sending money from UK to various countries.
|Destination country||Total average time of transfer|
|Domestic||Normally same day|
|UK to Australia||0-2 business days|
|UK to Brasil||0-1 business days|
|UK to Canada||1-2 business days|
|UK to EU||0-2 business days|
|UK to Switzerland||0-2 business days|
|UK to UAE||1-2 business days|
|UK to Israel||1-2 business days|
Cut-off times and bank holidays
If you initiate a transfer of money from your bank account to a bank account overseas, the day and the exact time of the day influence how long it would take it to arrive.
If you transfer money after the cut-off time at the end of the week, the transfer may only be sent in the next Monday.
If you book a transfer after the cut-off time and there’s a bank holiday the next day, it will delay your transfer until the end of that bank holiday.
Similarly, the recipient’s country banks’ national holidays and hours of operation have the same impact.
If you transfer money to Israel, for example, after the cut off time on Thursday, the transfer won’t even begin on Friday because Israeli banks don’t operate on Fridays.
Below you can find the cut-off time per currency in Barclays as an example.
|Same day value currencies|
|Currency Payment||Currency Code||Cut-off time|
|Mexican New Peso||MXN||9:15|
|South African Rand||ZAR||10:45|
|All are UK times|
|Currencies for value next working day|
|Currency Payment||Currency Code||Cut-off time|
|United Arab Emirates Dirham||AED||14:30|
|Hong Kong Dollar||HKD||14:30|
|New Zealand Dollar||NZD||14:30|
If you were to use Wise and transfer money to another Wise customer, the transfer could be instantons.
Similarly if you use an eWallet like PayPal or Skrill for sending money abroad (but at an incredible cost, detailed below).
Bank Transfer Vs PayPal Vs Bank Transfer Vs Specialist for Overseas Transfers
If we compare some of the most popular ways of transferring money abroad, namely PayPal, banks, cash and specialist providers, we can say that:
- Cash seems to be the most dangerous and worst way to transfer money
- PayPal is the most expensive way to transfer money overseas on average
- Banks are the most comfortable, safe and heavily government insured, but more expensive than specialist provider
- Specialist providers can offer saving of several dozen percentages against banks and potentially even more vs PayPal or cash exchange
Here is a summary of my findings:
|Way of transferring||Pros||Cons||Bottom Line|
|Cash||Simple – just carry money with you abroad||Illegal if you don’t report to HMRC, risky, messy, no proof of payment, you need to travel to the location you want to pay||Worst way to transfer money abroad|
|PayPal||Extremely simple, fast, secure, easy to defend from scams with the G&S policy||Very high fees (up to 5% with PayPal), recipient needs to have an account with the same provider, need money on account or a debit/credit card that can handle large withdrawals||Terrible way to transfer large amounts|
|Bank||Safe, doesn’t require you to sign up with another service, no need to use a debit or a credit card to make payments||High wire transfer fees (up to £30 per transfer), bad exchange rates (up to 3% currency exchange rate), no dedicated support, some banks don’t allow to make international transfers without physical presence in bank||The most standard way to transfer money abroad, safe but expensive without any additional perks|
|Currency specialists||No wire fees (for top providers), better than bank exchange rates, dedicated dealer supporting large transfers internationally (from £10,000 or equivalent with most specialists), ability to hedge currencies for future payments through tools like Forward Contracts||Money not covered under FSCS ins some instances – speak with your provider to learn more||The most cost effective way to transfer money abroad today|
Conclusions on the best way all around
To summarise, sending money internationally is no easy task at first when you have to figure out your recipient’s details and find how which is the best way to send money to that recipient…
But soon after, when you have signed up with a provider which should be no more than 5 minutes of your time…
You will be introduced to a new world of finance when customer is king and prices matter because there is an abundance of alternatives.
The world of digital providers and brokerages is very different than those of banks who rely on their customers to simply stay put regardless of fees.
It’s also very different from PayPal’s – who offer an added value of inconvenience, speed, and minimal paperwork (compared to bank transfers).
For brokers and digital money transfer providers, there is a vested interest in offering bank-beating rates so that people would even consider them.
Take advantage of that, and find yourself a better way to send money.
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