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Best Way to Send Abroad

Those looking to send money internationally have more options than ever to do so.

Gone are the days where the only option to get your money overseas was a drawn out and expensive process.

To be clear, many of the available methods are still very expensive, which is why we’ll help guide you to the best and most cost effective provider for your needs.

Perhaps you’re a business servicing suppliers or customers abroad.

Or an individual supporting your family that is based overseas. Maybe you’re investing abroad, or purchasing a property. Whatever your reason for sending money abroad, your unique requirements will lead you to a specific type of provider, as each has its own strengths and weaknesses.

No time to wait?

If it’s a quick answer you’re after, we’ve summarised below why you should avoid the most popular route, banks, and instead opt for choosing a currency broker, our recommended provider for most use cases.

Ideally you’ll have time to get into some of the details, as we later run through banks, remittance companies, online money transfer apps, and currency brokers, exploring each of their pros and cons.

Choose brokers over banks

Sadly, the majority of people still default to using their bank for international transfers, unaware that banks are seldomly the best way to send money abroad, due to costs, complexity and service.

As creatures of habit, many people choose a route that’s familiar, or one that feels safe.

Unbeknownst to them is an array of well established, and regulated, global specialists in international transfers, that offer more competitively priced transactions with unrivalled service delivered by foreign currency experts.

Thankfully, there are thousands of savvy businesses and individuals who opt to use a currency broker, many of which have large and ongoing transfer requirements.

The nature of a currency broker’s service is more applicable to medium and larger sized transfers, let’s say over 5,000 GBP or equivalent.

Smaller transfers do not warrant the need for the level of service provided by currency brokers, which is why many providers will have a minimum transfer limit.

So, if you’re sending more than £5,000, and you’re using your bank rather than a currency broker, you’re missing out!

In a nutshell, this is how currency brokers compare with banks for overseas transfers.

Send money overseasWith a bankWith a broker
FeesNormally around 10-15 PoundsNo direct fees
FX Spreads2%+Normally under 1%
OnlinePossible to transfer online with most banksComprehensive online trading system
Phone ServicePossible, but not bespokeBespoke for large transfers, speak to the same account manager
StaffBankers who don’t know much about foreign exchangeCurrency specialists

moneycorp (top rated broker)

Based on our testing, moneycorp, one of the first brokers in the UK with more than 40 years of experience, provides the best service for businesses and individuals looking to send money abroad with a broker.

How do I know the ‘best’ way to send money abroad?

Before we get into the pros and cons of the various ways to transfer your money, it’s useful to first ask yourself a couple of key questions.

This will help guide you to the right type of provider faster.

Undoubtedly, one of the biggest questions to ask is ‘how much am I sending?’ 

You’ll also want to consider ‘where is my money being sent?’ and ‘how quickly does it need to arrive?’ 

A final point to consider, is whether or not your recipient has a specific need to collect cash, as there are specialist providers more geared toward these types of transfers.

These questions can help you rule out certain providers, which will ultimately make your decision easier, as you’re choosing from a smaller pool of options.

Ways to transfer money abroad

Banks

Pros

Besides being a very safe way to transfer money abroad, banks only offer one other strong benefit, convenience.

It’s the same reason that many people default to using their bank.

You’ve already registered, meaning there’s one less barrier to get your money from A to B.

By avoiding a sign-up process, banks are also a fairly fast option for sending your money abroad in certain cases.

Cons

Banks are one of the most expensive choices for international transfers, which is based on a number of factors.

Firstly, many banks charge high transfer fees, particularly if you’re initiating your transfer in-branch or over the phone.

On top of high fees, banks also implement a high FX markup on the interbank rate, meaning you’ll often lose an extra 2-5% of the transfer total as a result of a sub-par exchange rate.

You’d think that being subjected to high fees and poor rates would at least give you access to some industry leading experts right?

Wrong.

Banks simply don’t compare to specialist money transfer companies when it comes to knowledge and service.

Remittance Companies

Pros

Remittance companies allow your recipient to collect your funds in cash.

This is useful in certain circumstances, like when you’re sending money to a more exotic location and the recipient does not have a bank account.

Cons

They’re among the most expensive routes for transferring money abroad.

Alongside non-competitive exchange rates, many remittance providers add on significant fees.

Therefore, we’d only recommend this route in the event that your beneficiary can only receive cash.

Money transfer apps

Pros

These providers offer the most competitively priced international transfers available.

The majority of these FinTech providers offer zero fee transfers, simply adding a small markup to the current fx exchange rate to make a profit.

This is largely due to offering a streamlined solution, meaning the user has to make sacrifices as a trade-off for getting the cheapest transfers.

Cons

Money transfer apps offer very slick user interfaces, and that’s because you have to initiate and manage the entire transfer process yourself.

This means you don’t have access to a dedicated account manager, and for any support at all, you’ll usually be waiting a while to speak to someone, or guided to a live chat option.

You’re also limited to making spot transfers, as you don’t have access to hedging tools offered by other providers.

So whilst money transfer apps are a fantastic option for simple and smaller transfers, say less than £5,000, the limited service and support is why we do not recommend them for transfers any larger.

Currency Brokers

Pros

To reiterate what we touched on earlier, currency brokers are your go to solution for all international transfers more than £5,000.

This applies to both individuals and businesses.

Perhaps the biggest benefit is being assigned a dedicated account manager, who will provide support and updates on demand.

These account managers are FX experts and overseas transfer specialists.

They’ll provide guidance on how to best time your transfer, and run you through available hedging tools such as ‘forward contracts’, if they’re suitable for your transfer needs.

You’ll also receive bank beating exchange rates that are highly competitive, and you’ll most often pay zero transfer fees.

Cons

The minimum transfer limit varies between providers, which can catch some users out.

This can be frustrating to someone that, for the most part, has a requirement for medium to large transfers, but has the occasional need to send a smaller amount.

Another disadvantage, only applicable to some brokers, is not having access to an online platform, or that the platform is less optimised than other dedicated app providers.

This is only true in some cases, as some of our recommended providers also offer fantastic online platforms. The best of both worlds.

In case you’re wondering what we meant by currency brokers assisting in how to best time your transfer, let us explain.

Is it the right time to send money overseas?

A question we get asked a lot is ‘should I be concerned about rates moving against me?

If you’re sending any significant amount, let’s say £5,000 or more, then currency swings are definitely something you should be paying attention to.

Despite being an historically strong currency, the British pound has been on somewhat of a roller coaster in recent years.

Other major currencies have also been fairly volatile, as the world has experienced significant events like the COVID pandemic, and the ongoing war in Ukraine.

These types of events have a huge global economic impact.

This is where choosing a currency broker is hugely advantageous.

Whilst they can’t provide ‘financial advice’, they can provide guidance based on the history of your currency pair, as well as insight on upcoming events that are likely to have a significant impact on your transfer.

Hedging tools like forward contracts, or stop loss orders, can also help protect you from downward currency swings.

This ensures you’re either securing a rate you’re happy with.

How it works

Sending money abroad with a currency broker is not a complicated process, but for a better idea of what to expect, we’ve broken it down into simple steps.

Sign up

Similarly to banks, you can’t just send money without them knowing who you are, so you’ll first need to register with your chosen provider. Currency brokers work in tandem with banks and use them to facilitate the transfers eventually, so these ‘Know your Customer’ checks are often  similar.

In the UK, advanced brokers like moneycorp have their own online verification system.

So for most cases, as a UK resident, you’re able to simply upload a couple of documents,take a selfie, and you’re good to go.

For businesses, the process can be a little longer as it can often require some back and forth communication with the broker’s compliance team. Agree on a rate

Once registered, you’ll be granted access to the broker’s online system.

Some brokers don’t have such a system but those are smaller brokers and we would generally suggest avoiding them, giving what’s on offer from our recommended currency brokers like TorFX.

Within the platform, the rate you see might not necessarily be the best that you can secure.

If you have a significant requirement, speak to the broker to try and negotiate your rate.

If easily available, present a like for like quote from a competing provider (must be “real time” otherwise rates would change by the time you try to negotiate).

Once you agree on a rate, you can lock this in with your dealer and your transfer is ready.

Fund your transfer

You’llnormally have up to 48 hours to fund the transfer.

This requires transferring money locally to aGBP bank account owned by the broker.

You shouldn’t be concerned about transferring money to such an account.t.

This is a standard procedure and these accounts are ‘safeguarded’ as per FCA regulations.

This means the funds can only be used for your transfer and if the company goes out of business, your funds can’t be used to pay company debts or other creditors..

Transfer in motion

Once your international money transfer has been funded in full, your provider will initiate the transaction.

With a bank, you might find yourself chasing the support team  for an update on the status of your transfer.

Has it got stuck? Were additional fees incurred along the way? This is important as it might leave your recipient with less funds than they expected to receive, which can cause issues.

Working with a currency broker, you can expect full visibility of the location of your funds from the moment they have been sent, as well as an expected time for the completion of your transfer..

You’ll also know how much NET your recipient will receive, to avoid any complications between you and your beneficiary.

Is my money safe?

This is a natural concern for those stepping away from their bank for the first time.

Thankfully, we can answer in confidence that yes, your money is safe when working with any currency broker that’s appropriately regulated.

Your chosen broker should be registered and authorised by the FCA, the Financial Conduct Authority.

If a payment provider goes bust, ‘safeguarded’ customer funds are only at risk in one scenario. This is when the liquidator’s costs exceed the cash held by the business.

Safeguarded customer funds cannot be used for any other purpose and, unlike the FSCS, there is no limit on the amount you can get back.

For added peace of mind, many of our recommended providers operate globally, meaning they’re regulated in multiple jurisdictions by several different regulators.

What’s the fastest way to send money abroad?

Most overseas transfers made via a currency broker should arrive within 2 business days, often even faster depending on the destination currency.

If you have a more urgent need for your funds to arrive, you’re best off using a money transfer app like ‘Wise’, as long as your recipient also has an account with the same provider.

With money transfer apps, if both the sender and beneficiary have an account, then transfers are near-instant.

This is also true for e-wallet providers like PayPal, but as a reminder, they are one of the most expensive routes for international transfers, so they should be avoided unless there is no suitable alternative available.

Summary – when to use a currency broker for overseas transfers?

You now have a much clearer understanding of your options for sending money abroad.

With this knowledge, you can swerve the costly method of using your bank, and get a far more competitively priced offering along with better service elsewhere.

Looking to send more than £5,000? Then we highly recommend using one of our top rated currency brokers like moneycorp or TorFX.

If your requirements are for smaller transfers only, and you’re solely focused on the cheapest method, regardless of service, then an online only provider like ‘Wise’ is your best bet.

Whatever your transfer requirements, you can now consider yourself part of the more savvy group that are making international transfers the smart way by choosing a bank beating alternative.

Time to start saving!