All you need to know about transferring money and sending money abroad
Sending money abroad
When it comes to transferring money in the UK, it is relatively easy to pay from one account to another. However, when you want to send money abroad, it can be much trickier. If you wish to pay for a service or product overseas, then this guide will help to explain how to conduct money transfers and send money abroad.
What is a money transfer and international payment?
Put simply, an international payment or transfer is a way to send money overseas. There are lots of methods to send money abroad, and there are many factors that can influence which is the best method for you.
There are several aspects you need to consider before sending money abroad;
- How much you want to send
- How often you will make the payment
- The way the recipient wishes to receive the payment
- How quickly the payment needs to be
- How much is it going to cost?
What you need for an international payment
To make an international payment, you will need to have various information for the payment to transfer successfully. Before beginning an international payment, you will need to note the following information;
- The full name of the recipient
- Address of the recipient
- The International Bank Account Number (IBAN) or account number for the recipient
- The name and address of the recipient’s bank
- The Banking Identifier Code or SWIFT code or clearing code
- The amount you want to transfer.
The cost of sending money abroad
There will be a cost for sending money abroad. This is usually made up of two costs. The first is the fee for the transfer. This may be a fee for both the sender and recipient. Some providers will use lots of little additional charges to disguise a larger fee.
Secondly, there will be a cost of the exchange rate. While companies may offer commission-free transfers, it is likely that they will make a commission in the exchange rate by either worsening the rate or not sharing their exchange rate with you.
Different banks and financial services will offer different fees and exchange rates; it is best to compare lots of providers in order to find the best deal for you. However, it can be challenging to get a definitive answer. The exchange rate fluctuates throughout the day and may not always be the cheapest provider at the time that you send the money.
It is worth noting that the more you are transferring, the better the rates will usually be.
How to send the money
There are three main ways to send money abroad. This will be through a bank or building society, via a foreign exchange broker or a transfer firm you can find online or on the high street. Each will have their own advantages and disadvantages.
Banks can be very helpful in arranging international payments. They can guide you through the payment in the branch, via the phone or by using a mobile application or website with online banking. As you regularly deal with the bank, it makes the process quick and convenient. Furthermore, most banks will offer a degree of protection for sending money overseas.
There are drawbacks to using banks. Firstly, a bank may take a long time to transfer the money; it could take up to six business days. However, some banks will offer an express service. However, this may cost you extra. Another negative is the fact they may not be the most competitive with their rates. Larger transfers will often benefit from using a specific foreign exchange broker.
Money transfer firm
Money transfer firms will offer a range of services to find the right one for your needs. Some can provide instant cash to the recipient. Typically, money transfer firms are known for being very easy to use and extremely fast.
For money in a hurry, a money transfer service may be best for you. However, with the fast service usually comes a high fee. Even transfers of small amounts can generate a high fee. Furthermore, the money is not protected by the Financial Services Compensation Scheme if the provider goes bust.
Foreign exchange broker
As a specialist in this industry, foreign exchange brokers will often have low fees for large amounts of money. They will also usually offer a good exchange rate and ensure the money is transferred quickly which makes them ideal for regular transfers.
However, foreign exchange brokers are not usually designed to process small payments. Some providers may not accept small payments or will enforce high fees for doing so. Another drawback is that you usually have to set up and pay into an account, which can be a hassle if you want to send money in a hurry.
It is best to compare all three options and a range of providers before determining the best deal for you.