Is Sterling FX Safe?

Company size:

Sterling FX has been involved in the banknotes business since 1972 and was one of the first bureaus to be offered a licence to trade by the Bank of England. Being the first bureau de change on Edgware Road to operate as a money services business, the company was a pioneer in offering zero commission on all foreign exchange transactions to clients. It later incorporated into a limited company in 2006 known as Sterling Consortium Ltd. In 2010 Sterling’s branch operation began its online offering to provide excellent value to customers throughout the United Kingdom.

Based in central London and being a wholly owned subsidiary of Sterling Consortium Limited, Sterling FX is registered in England and Wales under company number 05850613. Sterling FX is listed on the Financial Conduct Authority register (FCA no. 504439) under the PSD Directive and governed by HM Revenue and Customs as a Money Service Business (MSB registration no. 12120971).

Sterling FX holds a money service business licence with HMRC for the provision of currency bank notes (i.e. bureau du change). However, despite being a well trusted and well reviewed business over a number of decades, Sterling FX IS NOT authorised with the FCA as a payment provider.

Sterling FX offers Sterling FX international money transfers simply through being registered with the FCA. We have no reason to doubt Sterling FX’s credibility but we do not recommend working with simply registered payment providers. See our guide to international money transfer regulations to learn more.

Sterling FX has a team of multilingual individuals with a strong expertise in foreign exchange. They are fully trained in all areas of compliance, customer service and currency exchange to ensure that customers have a reliable and a stress free experience.

Following many decades of success as a physical provider of travel money and bank notes, Sterling FX International Money Transfers launched in March 2020. With a simple interface, Sterling FX international payments offers clients a no-frills and easy approach to sending money internationally online. With both spot and forward contracts available, customers are also able to place an order over the telephone.

Regulated by:

✗ Registered with but not authorised by FCA

Awards:

None.

Conclusion: 

Established in 1972, Sterling FX has a long-standing history in the foreign exchange industry as a bank note and travel money provider. It has an excellent reputation in this field and is one of the best-rated travel money providers in the UK.

With over a 1,000 glowingly positive reviews, primarily relating to the travel money service, it’s evident that Sterling FX is a trusted and knowledgeable provider in the foreign exchange industry.

However, it does concern us that the firm is only registered with the FCA for the provision of Sterling FX international money transfers. As a general rule, we recommend only working with authorised payment providers – it’s authorised payment providers that have to adhere to strict protocols around managing client money. That being said, Sterling FX does appear to adhere to these, even though the firm is not authorised. A look through the Sterling FX international payment T&C’s shows us that this firm operates in the same manner as larger, authorised payment institutions. ‘Relevant funds’ i.e. those required to fulfil payments, are held in segregated customer accounts, whilst funds held for longer periods on behalf of clients are held in safeguarded customer accounts (i.e. protected in instances the firm goes bust). Funds held as a deposit on forward contracts are not held in safeguarded accounts but this is the same as how authorised providers operate.

From FCA register :

Given that the firm only launched Sterling FX international money transfers in 2020, it’s likely the service is still relatively small and this is  the primary reason as to why Sterling FX is not fully authorised with the FCA. To be a small payment institution which is simply ‘registered’ with the FCA, you must transfer under €3 million a month – so whilst this might explain why Sterling FX is not fully authorised it does bring to the fore a bunch of other issues around liquidity and maximum payment volumes.

SterlingFX Customer Reviews

Research:

Sterling FX has amassed over 1,300 reviews on TrustPilot, one of the most recognised review platforms across the world, amassing a highly impressive 4.8 / 5 review score.

On Google Reviews, the firm boasts a 4.9 / 5 score based on over 1,300 reviews.

On Facebook, Sterling FX bags a 4.7 / 5 score based on a modest 28 votes.

Conclusion:

Overall, Sterling FX has phenomenal feedback. Attesting to the fact that Sterling provides a reliable and competitive service. The issue is that so much of it relates to Sterling FX international money transfers. Sterling FX appears a market leader for this particular area of the market and is known to provide some of the best ‘buy back’ rates out there for physical banknotes, i.e. converting foreign currency that you bring home on your return to the UK.

There are a small handful of reviews which specifically relate to Sterling FX money transfer, and to be fair, these are all positive. They explain how Sterling FX delivered just as it promised and successfully got the money to the beneficiary on time and with little fuss.

The overall impression of Sterling FX is positive but a handful of reviews specifically relating to Sterling FX international money transfers is just too little to go by. We aren’t able to establish a consistent track-record which specifically relates to online payments.

SterlingFX Exchange Rates & Fees

Research:

Fees: Payment fees for Sterling FX international transfers are dependent on the speed of transfer you select. If you opt for the Low Cost Payment service then no fee applies but transfers will take longer. If you opt for the Quick and Easy Payment service, then a fee of 0.39% will be applied to your order.

This is quite an unusual move as most currency brokers offer either a) free international transfers, or B) fixed-fee international transfers (e.g. £2 payment fee to major destinations and £8 to exotic). The only slightly comparable service is that provided by Wise, who charge a different ‘variable fee’ depending on whether a fast or low cost payment is selected. A fast GBPUSD payment with Wise is charged at 0.65%, whilst a low cost payment is charged at 0.35%. So at first, it appears Sterling FX is cheaper, however, and this point is crucial, Wise charges its ‘variable fee’ instead of an exchange rate spread. Sterling FX charges an exchange rate spread in addition to a 0.39% payment fee for priority payments. Currency brokers like Currencies Direct and OFX charge an exchange rate spread but offer fee-free international transfers.

Those sending large amounts will want to be especially cautious – a variable payment fee means the larger the amount sent, the higher the fee will be (as will be the case for the exchange rate spread too).

Low cost, non-priority international money transfers with Sterling FX would avoid this situation as only the exchange rate spread is applied.

Exchange rates: Like a number of money transfer companies and currency brokers, Sterling FX does not publish the FX spread it applies when exchanging currency but we assume the larger the amount that is sent, the better the exchange rate you’ll achieve. Sterling FX does conduct a monthly exchange rate comparison against major high-street banks to prove it comes in cheaper.

Source: sterlingfx.co.uk/currency-exchange-rates#transfers (January 2022)

This is just what we’d expect through Sterling FX international payments – with less overheads and a fairer policy compared to banks, they can offer a lower price to individuals and SMEs.

However, as highlighted in the fee section, we’d proceed with caution when opting for fast transfers – it’s unusual to have a variable payment fee added on top of an exchange rate spread (which in effect is another variable payment fee also calculated as a % of the overall transfer).

Limits: Due to its status as a ‘small payment institution’ with the FCA, Sterling FX is unable to transfer more than €3 million euros per month as a combined total across all of its client accounts. Companies like Moneycorp and Global Reach regularly handle one-off transactions which are multi-million pounds and have absolutely no maximum payment limits whatsoever.

Conclusion:

We don’t like the fact that priority payments are charged a variable payment fee in addition to a variable exchange rate spread. When both of these costs are calculated as a % of the overall transfer, the cost of the transfer can soon start to get very expensive, particularly on large transfers. For those sending smaller amounts (say under £1,000) it’s not such an issue. This can be avoided by opting for low cost Sterling FX international transfers (which have no payment fee) but by working with virtually any major currency broker, you’ll receive fee-free international transfers with no impact on the speed your payment is delivered.

SterlingFX Global Reach & Service

Research:

• Dedicated Dealer: Yes
• Offices: London, UK
• Ways to approach: Telephone & Online platform
• Translations: No, but the staff does speak a few languages
• Accepts clients: UK
• Currencies Handled: 23
• Client reviews: Over 1,300 on TrustPilot (4.8 / 5), a leading review platform around the world

Conclusion:

Sterling FX is a UK-only foreign exchange company that has built on their success as a bureau de change to launch Sterling FX international money transfers. Thus, its target audience appears mainly to be individuals who are based in the UK and have had positive experience with Sterling FX for the provision of travel money. The firm is by no means as international as many of the largest providers on the market, such as OFX, who offer money transfer services in the UK, Europe, US, Canada, Australia and NZ.

With 23 currencies offered, the vast majority of major currencies are available through Sterling FX. However, for those looking to send money to more remote destinations, they may prefer the 100+ currencies offered by Moneycorp.

Additional Functionalities

• Spot Transfers
• Forward Contracts

App:

No app functionality.

Collection Accounts:

None.

Conclusion:

Sterling FX international payments are offered through two main foreign exchange solutions; spot contracts (payments to be made now and settled within 2 days) and forward contracts (payments to be made in the future, i.e. 2 days+). This is better than online-only competitors like Wise and Currencyfair who simply provide spot contracts, however, this is a worse selection than the majority of money transfer companies like Currencies Direct and TorFX who offer these tools in addition to market orders and flexible forward contracts.

The ability to trade over the telephone is a definite plus but the lack of an app works against Sterling FX in our rating. It’s understandable given the small nature of Sterling FX money transfer for now, however, individuals and SMEs keen to make payments over an app should see our guide to the best international money transfer apps.