Using an international money transfer service instead of your bank when paying international employees or invoices can save you both time and money. We break down the best ways to make an international business transfer so you can get back to work quicker.
There might be a number of reasons why your business needs to transfer money overseas. Here are the most common:
Take a look at the ways you can make and request payments across borders to figure out which is best for your business. Depending on the reason for your money transfer, you may have many options at your disposal, some better suited than others.
Money transfer providers are specialists that can get your funds from A to B at a low cost. And they’ll likely hit your account – or the account of your supplier, contractor or employee – sooner than other options such as banks.
Many specialist money transfer specialists also offer forward contracts, limit orders and recurring transfers to save you time and money.
Compare business transfer services
For a service that goes beyond directly sending and receiving payments, a business payment account with a money transfer provider may better suit your business’s needs.
One such provider is Wise (formally TransferWise). Its account allows you to make business payments in more than 70 countries. You’ll also be able to pay and get paid as though you were local.
A bank-to-bank transfer may be the most familiar and well-trodden path, but it may not be what’s best for your business. International bank transfers often come with steep transfer fees and poor exchange rates. Some banks charge £20+, for example, while some money transfer services don’t charge a fee at all.
Learn what transfer fees major banks charge – and how to beat them
When you’re looking to pay your employees, you can potentially get everything handled by an international payroll service. It processes the entirety of your payroll and stays up to date on tax and regulation changes so you don’t have to.
Failing all other methods, you can send an international banker’s draft. It’s accepted in most countries. Doing so comes with quite a few drawbacks, including comparatively lacklustre security and slow delivery times.
Learn about how an international banker’s draft works
For business owners, time can sometimes be more valuable than money. You may think that because it handles your other finances, your local bank is the simplest and most obvious option when sending money overseas. In truth, international money transfers are no longer a game for only tried-and-true players such as banks. Newer companies and online money transfer providers promise to undercut the competition to earn your business and will usually deliver your money to recipients faster than the banks can.
Take a closer look into the following areas to find the best money transfer service for your business:
Let’s say you need to send £10,000 to a supplier in India. Here’s what you might face as far as fees and exchange rates as of 14 September 2021.
| Money transfer service | Major UK bank transfer | |
|---|---|---|
| Fee | £1.49 | £17 + additional correspondent and recipient bank fees |
| Exchange rate | 1 GBP = 101.09978 INR | 1 GBP = 99.82 INR |
| Transfer speed | Same day | 4 days |
| Amount received | INR 1,010,847 | INR 996,503 |
| Verdict |
|
|
The bank option is both slower and more expensive when paying your supplier in India. If you went with the money transfer service, not only would your recipient get the money faster, they’d also get an extra INR 14,344 thanks to stronger exchange rates and lower fees.
Banks may seem like the more convenient option, but once you set up an account with a money transfer company you can send money with a few clicks.
Your option for receiving funds is going to depend on what type of service you go with. Banks are likely to give you the option to open the account and get started in person, while a dedicated money transfer service will probably have fewer physical locations. You’ll probably also have options of opening an account over the phone or online.
The process is a bit more involved for business accounts, so set aside at least half an hour in most cases to get through the entire application. Make sure you have your personal details, business information and any relevant financial information you may need.
Income from abroad is still taxable in the UK. Also be aware of any international tax laws that might apply, especially if you have an international bank account. While there are many treaties around the world to avoid double taxation, you may still be subject to additional taxes.
Because tax guidance and regulations can be confusing for businesses with foreign income, you’ll likely want to seek out a business accountant to make sure everything is above board. Some international business payment solutions like FlyWire can also help you manage your business taxes.
When sending a business money transfer, you may be quoted one fee on top of the amount you want to send. But if you look closer or ask for a breakdown of this fee, it could relate to a number of hidden fees relating to the following:
While there’s no one perfect product for making an international business transfer, knowing how to evaluate solutions and find the best one for your business goes a long way. Compare international money transfer providers to get more details on the services offered, how to better measure them against one another and what to do once you choose one.
A business with overseas interests may have large amounts of money going out and coming in on a regular basis. In order to make these business transfers cost effective, a business may turn to a service that specialises in international money transfers rather than use a bank. These specialised services can offer the best exchange rates, fastest delivery speeds and the highest transfer limits – all at a competitive price.
Yes, many banks and transfer companies offer the convenience of recurring transfers.
The transfer delivery speed will depend on the currency and the country you are sending to or receiving from. Business transfers will generally take between 1 and 5 business days. However, instant or same day transfers may be available.
Nearly all money transfer services provide a unique transaction ID that you can use to check the status of your funds. In most cases, you can do this online or by phone.
When processed through a reputable bank or money transfer provider, your funds are safely tracked until in the hands of your recipient.
In many cases, yes. A business money transfer service tends to offer better exchange rates, lower fees and faster delivery speeds compared to banks. However, it very much depends on the currencies, the sending and receiving countries and the exchange rate offered at the time of the business transfer. A little research into your options will pay in the long run.
As more businesses plan to go global, find out how WorldFirst’s multi-currency account could benefit your operations. Paid content.
Learn about how Small World alternatives can help you send more money for less.
Revolut has made a name for itself as a favourite for frequent travellers by offering great currency services. Stick within the “fair usage” limit for your plan and the pricing can be hard to beat.
Learn about taxes on large-money transfers to the UK from abroad, including penalties and exceptions.
Xe is a leading company of currency solutions that offers competitive exchange rates, no fees and fast money transfers.
Lloyds Bank provides a range of options for sending money overseas to friends and family. See exchange rates, fees and services here and compare your options.
Check out our review of TorFX’s fee-free money transfers.
Read our Wise review to see the exchange rates, fees and what to expect when you send a transfer.
If you’re thinking of sending a money transfer with Western Union, read our review of its transfer speed, exchange rates and fees first.
Send an international money transfer to someone without a bank account. Get it there instantly and they can pick it up in person, in cash. Get quotes now.