An international money transfer is an electronic transfer of money to family, friends or a company overseas. You send money from your bank account to an intermediary transfer service, or a bank, who then exchange and send the money through to the recipient’s bank account in another country.
What will it cost me?
There are two ways that a provider makes money on your transfer.
One is the transaction fee, the fixed amount you’re charged for using the service.
The second is through the exchange rate, which will vary from provider to provider.
Finding the lowest rates is usually the best way to find the cheapest deal. Let us explain this in a bit more detail.
Providers might charge a set fee for using their service, say £20 per transfer. So that’s one cost.
Another common way of charging fees is as a percentage of the transfer, for example 5% of the amount you’re looking to send.
However, low fees are not the only way to get the best savings. It’s crucial to also check the exchange rate.
Here are a few guides to international money transfer fees you might find handy:
Here’s the bottom line: unlike a savings account or a current account, there’s no compensation you’re entitled to if your provider goes bankrupt.
If you use an online transfer company and it goes bust, there are no guarantees that you can claim the money back. This might sound scary, but regulation on these companies is extremely rigorous. The chances of them going bankrupt is very, very low.
Here’s an important distinction to make:
If your provider is ‘authorised’ by the Financial Conduct Authority (FCA), your money is ringfenced. You should be able to get it back if the provider goes bust.
If your provider is only ‘registered’ , there are no guarantees.
You can check the status of companies easily enough by searching the name in the FCA register.
How can I save on my transfer? Here’s a 60 second video
Business or personal transfer?
Consider the purpose of your transfer. Are you sending money to friends and family overseas, or are you a business looking to pay for goods and services, potentially regularly?
For business owners, time is hugely important. Without time to research our options, we often end up going with our bank. But a little planning can set you up for significant savings on your transfers.
If you send transfers of £1,000 every week, you could save around £17.50 each time. That’s a savings of £875 a year simply by choosing a competitive independent service over your bank!
Most online money transfer services allow you to send and receive almost instantly. It’s transferring the money from the service into your bank account that might take a few days. Similarly, bank-to-bank transfers also take a few days to clear.
If you need to send a same-day or emergency transfer, most of the services allowing you to send and receive cash will allow your recipient to pick up their funds quickly, often within an hour.
The currencies available for you to send overseas can vary depending on the company you choose. Some services may only offer transfers in a few major currencies, while others will allow you to send transfers in up to 50 currencies or more.
There’s no ‘best’ way to transfer funds overseas. It depends on how much you’re sending, how soon you need it to be made available and the exchange rates at the time. But below are a few tips you can use when sending money overseas.
Know your transfer currency’s mid-market rate. This rate is the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves. Use it as a baseline to compare against the rates you’re being offered. The company that’s closest is offering you the best rate.
Send more money per transfer. Many services discount the fees or waive them altogether when you send larger transfers. HiFX, for example, waives fees for all transfers above £3000. Sending less comes with a flat £9 fee.
Use forward contracts and limit orders if sending money regularly. A forward contract allows you to lock in a favourable exchange rate for future transfers. This means you avoid unpredictable movements in exchange rates. A limit order allows you to wait until a favourable exchange rate is found and then locks it in for your transfer.
Send same-currency transfers. It can sometimes be cheaper to transfer US dollars to your recipient, allowing them to transfer the dollars into their own currency when received. Depending on the situation, your recipient could pay lower fees overall.
How to avoid a money transfer scam
You’ve undoubtedly heard about somebody who’s fallen prey to a money transfer scam. Scammers are becoming more sophisticated, using increasingly elaborate plans in an effort to separate you from your money.
Common scams to look out for include:
Advance fee scams. Maybe you’re notified you’ve won a prize or the lottery, but you need to first pay a fee to receive it. Perhaps you’re “approved” for a loan but must wire a down payment. In both cases, you’re probably dealing with a scammer.
Bogus check scams. You may have gotten a reply to your online auction with a check that’s for more than your item — all you need to do is wire back the difference. The check is likely fake, leaving you on the hook for both the money you wire and a bounced check fee from your bank.
Wire payments only scams. If anybody online says you can pay only with a wire transfer, find another retailer to do your business with.
Phishing scams. Be wary of unsolicited emails or calls asking you to resend or confirm personal information or passwords. Instead, take down the name of the company and contact them directly with questions.
If you suspect you might be the victim of a scam, contact the FCA.
Need help? Walk through a money transfer with the help of an expert
Save money on your personal or business international money transfer today. Fill in the form and you’ll be contacted by a foreign exchange expert to have an obligation-free discussion about your options.
With over 17 years of foreign exchange expertise and over $100 billion transferred, OFX can help with all your currency exchange needs, including:
Buying property abroad
Regular overseas payments
Frequently asked questions about money transfers
Most services will give you a tracking number or ID that you can use to check the status of your transfer. In many cases, your recipient will also receive one so they can check.
The maximum you can send depends on both the transfer service you use and the type of transfer you’re making.
This could be for a few reasons — including whether the country is currently under economic sanctions (such as Iran) or your transfer service hasn’t yet built the facilities and networks needed to send money to a particular country. See the countries you can send money to on our individual review pages.
The quickest money transfers will arrive instantly depending on the specific service you use and where you’re sending the money to. Western Union can have funds to your recipient almost instantly. MoneyGram, on the other hand, can send funds to China that are available in as little as an hour, but funds are available the next business day when sent to France.
Other services like OFX can take longer than quicker cash services like MoneyGram and Western Union. Sending money to Australia using OFX takes at least a day, whereas countries like Canada can take one to three days.
Yes, a number of providers have fee-free thresholds for international money transfers. For example, HiFX charges no fee for transfers of £3,000 or more, while Halo Financial charges no fee for transfers of £5,000 or more. Keep in mind that even if a service is free, you’ll likely pay through a margin applied to the exchange rate.
Yes, PayPal is a popular way to make international payments. Both the sender and the receiver need an active PayPal account. Once the funds are received, the money then needs to be transferred to a bank account to be withdrawn. PayPal international transfer fees vary according to the method of payment. Using a credit card to credit a PayPal account with money is more expensive than transferring the money from a bank account. The fee is a percentage of the total transfer amount.
Yes. It’s industry standard for international money services to use 128-bit SSL encryption systems at a minimum. Many also are licensed with UK financial regulators.
Yes, it’s possible to send the same currency overseas. One option is to buy funds in a foreign currency when you start the transfer. In this case, you’ll be charged a currency conversion fee. Another option is to deposit funds into a multicurrency account. Exchange rates may be as competitive using this method, and you may pay fees when making a deposit. The fees and charges could outweigh the cost of converting the money and sending it in your local currency.
Charlie Barton is a publisher at Finder. He specialises in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
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