📖 How to choose the right service for large sums

We have been covering a very large variety of international money transfer services since 2014.

We have looked into 90+ providers to date in pursue to find the best way to send money.

Some are apt for large money transfers, some are more focused on smaller transfers and remittances (mostly digital providers).

Whether you are sending a significant amount of money for property, business or any other reason…

You should know that there’s a way to save money and get tailored service which may prove very helpful in the situation.

Which ways do you have to transfer money?

Here is an easy comparison of the most popular ways of transferring money.

Cash, PayPal, bank and currency specialists (inclusive of digital providers and brokers).

Cash is dangerous, unreliable, and expensive.

PayPal is convenient, but expensive.

Banks are convenient and are cheaper than PayPal, but still, expensive.

As you can see, currency specialists have all the advantages when it comes to sending money abroad.

Which is better for large amounts of money?

While specialists could be the obvious choice for money transfers as a rule of thumb…

There must be hundreds or thousands of those available at any give time.

Especially considering you are planning a major transfer, you should be thorough in your research.

The starting point would be to decide on digital provider Vs broker.

Digital providers are exclusively online.

They have a support team but it is often located abroad and not always helpful.

With that being said, they often have really cheap fees.

Those cheap fees are normally fixed for every transfer size.

They also often have really nice trading systems and apps with excellent User Interface.

They would not offer any guidance, nor hedging functions.

Wise

CurrencyFair

Instarem

Remitly

Brokers are a different beast.

Many of them were established pre-internet or at least before people considered transferring large sums online.

They are very service-oriented, and employee a large number of currency traders who do “personal care” for their clients.

That means you will be dealing with one Point of Contact and have their own phone number (rather than calling “support number” and potentially waiting for hours).

They tend to offer worse rates than digital providers for small transfers, but when it comes to large sums, they could be offering competing/better rates.

It’s recommend to hassle and wrestle a little with those brokers as their rates are negotiable (unlike digital providers).

Lastly, they offer guidance on hedging as well as an array of hedging tools (we’ll touch up on why that’s important below).

Currencies Direct

TorFX

moneycorp

Key Currency

Banks don’t need further introduction, really.

We all have bank accounts and the majority of us have been disappointed with at least one aspect.

If you look at recent satisfaction surveys for UK banks, the results aren’t amazing.

When it comes to international payments, they are expensive and obscure about their fees (with many customers unaware of how much they are actually paying with the bank’s exchange rates)…

That, with the lack of service we have most been experiencing, leads me to say banks aren’t a good option for large international transfers.

Understanding the advantages of brokers for large transfers

No fees

Perhaps wouldn’t make a big difference if you are transferring a large sum but still nice to save up to £25 per transfer (many large payments are split into trenches, in which cases you could pay that fee multiple times).

Better exchange rates

Brokers are built to offer better exchange rates than banks.

That doesn’t mean they will trade you at the interbank exchange rate.

Not at all. They still have to make money.

But they will offer exchange rates which are superior to the ones offered by the bank…

And then compete for businesses against other brokers, so you could re-negotiate that rate to be even better.

Safety

When you send a large amount of money, you would obviously be very concerned with the risk aspect.

With banks it’s clear-cut. They are highly regulated and your money is insured.

With brokers, there is a different type of regulation.

To handle customers money for international payments, you must posses an authorised payment institution or electronic money institution licence with the FCA.

That, among other things, makes sure customer’s funds are separated from those of the company (i.e. when you send money to fund your transfer, it will be to a joint account which is also on your name and cannot be used for anything other than exchanging money or sending it to third party at your request).

In addition to regulation, some of the firms in this space have been operating for decades and handles hundreds of thousands of customers including large corporations.

The best ones for large transfers are companies who are handling billions in customer funds each year, and are valued themselves at billions of pound, so not your average “Fintech”.

Hedging

Brokers will guide you in regards to whether and how you should be hedging your funds.

For example, if you have a payment that needs to be made in the future you may want to secure yourself against adverse currency movements.

Not only they will guide you on the subject, they will also offer hedging tools like Forward Contracts which digital providers don’t.

Understanding the advantages of digital providers for large transfers

Low fees

Each digital provider charges in a “different way” so to speak.

Some charge a flat fee, some charge a fee relative to your transfer, and some charge no fees but they use exchange rates spreads.

Whichever it is, digital providers are likely to be the cheaper option for smaller transfers.

Providers like Wise charge about 0.5% on average in fees.

State of the art technology

Some digital providers, like the aforementioned Wise, boast a very user-friendly platform.

They offer a very smooth experience and a highly-functional mobile app.

It’s not like brokers don’t have their own trading system and oftentimes apps, it’s that the best ones are offered by digital providers.

Potentially, speed

In some platforms, if the recipient also has an account, it could be possible that a transfer would arrive than what a bank transfer would normally take. This is a real case-by-case though and depends on your situation.

Why I prefer brokers over digital for large transfers

When it comes to sending money, both options are good.

Brokers are definitely more geared to large-volume transfers though.

This is their bread and butter. Business fx, and private clients with requirements above £25,000.

They really know their domain, and receive incredible reviews across the board (the good brokers, that is).

Some digital providers may be a little cheaper at not-very-large-transfers but to me, it makes sense to still stick to a broker if we are talking just a few percentage points.

Then for very large transfers, it’s very likely that brokers will compete over your business so that they will beat competing quotes from digital providers (depends on the actual quote, currency, volume, and market conditions – lower margin means more risk appetite on behalf of brokers, as they have their own costs to cover as well).

What are my limitations on the amount and currency?

UK law doesn’t have any limitation when it comes to transferring large amount out of the country.

Other countries may have limitations (South Africa does, for example).

Digital providers sometimes cap the amount you can send daily or in one go, but will commonly allow you to send any amount.

Then, brokers definitely don’t have a top dollar amount – you could send any amount whatsoever once you have passed the registration.

When it comes to currency, almost every digital provider and broker will support the top currencies globally.

To name a few of the most popular currencies among our readers – GBP, EUR, USD, AUD, NZD, CAD, HKD, JPY, SEK, NOK, RON, CHF, ILS, AED, SGD, ZAR – are all going to be covered with just about everyone.

Also geographically, if you are a British citizen you could send funds from anywhere in the world (but brokers won’t necessarily have a local account in every country).

And of course, send from the UK to anywhere on the globe, most commonly Spain, France, USA, Australia, New Zealand and Canada.

You could also use these companies to receive large sums from abroad.