Best Way to Send Abroad

There is a variety of reasons for people to send money internationally. For businesses, the case is clear – most businesses nowadays are international. They have suppliers and/or customers abroad. For individuals, it’s mostly about those who support family abroad, moved abroad, are investing abroad, or need to make a large payment for something they are importing into their home-countries.

Brokers instead of banks

The majority of those people will be using their bank to send money abroad but this is not necessarily the right fit for them. In fact, banks are seldomly the best way to send money internationally, due to costs, complexity and service.

Many businesses or individuals who have large or steady requirements opt to use a currency broker.

As a recap, a currency broker is a third party provider who helps customers transfer money across borders and currencies with lesser cost and tailored service (and hence, mostly applicable for large international money transfers that justify the usage. Normally, currency brokers will appoint you a designated account manager if your requirement is over 5,000 Pounds or equivalent).

How it works

Sending money abroad with a currency broker is not a complicated process, but it entails several steps as follows:

Sign up

One of the critical aspects of being able to send money with a broker is signing up. Similarly to banks, you can’t just send money without them knowing who you are and verify that the transfer is legit. You must remember that currency brokers work in tandem with banks and use them to facilitate the transfers eventually, so the checks will be similar.

In the UK, advanced brokers like moneycorp have their online verification system. So for most cases, if you are an individual with a British ID, you would be be able to upload some documents and take a selfie and you are good to go. For businesses, the process can be a little longer and require some back and forth emails with the compliance team of that currency broker, and similarly for individuals outside the UK / EU.

Agree on a rate

When you sign up with a currency broker you will 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 recommend to avoid them.

The only system access can be confusing because the rates displayed there aren’t necessarily great. They should be considerably better than banks but far from being optimal for a large currency transfer.

That’s what bespoke service is made for though – if you have a significant requirement, you could speak to the broker and negotiate your rate. It could be very handy if you bring in a quote from a competing provider for an international money transfer (has to be the same volume and currencies of course, and must be “real time” otherwise rates would change by the time you try to negotiate).

Once you agree on a rate, verbally, via email or through the online system (the broker can update your rates in the online system as well)…. your transfer is ready.

Fund transfer

After you agreed on a transfer you would have normally up to 48h to fund the transfer. Funding the transfer means transferring money locally to a GBP bank account by the broker. Via a bank transfer would be the absolute best way, as opposed to a debit card which may incur 2% in external costs by the debit card’s provider and card processor.

If you are concerned about transferring money to such an account, fear not. These accounts are ringfenced as per FCA instructions which means the funds in there could be only used for transfer and if the company goes out of business the funds are returned to the account funding the transfer.

Transfer in motion

Once your international money transfer has been funded in full, it will initiate.

While with a bank you could be used to chasing your banker trying to understand its status, whether it got stuck, were additional fees incurred along the way (which can leave the recipient of funds with less funds than expected on their end which can cause issues)…

With a broker you can expect full visibility of where the funds are at from the moment they have been sent, how much NET should the other end receive, and the expected time of completion. Including of course receipts, invoices and whichever is necessary.