How to pay bills in another country with an international money transfer

Do you need to send an international money transfer to pay an overseas bill? Here’s how you can shop around for the best exchange rate and lowest fees on your international payments.

Countries all around the world are better connected today than they ever have been before. As our technology continues to bring previously far-flung countries closer together, the reasons why we need to send money overseas are always increasing. If you rent a property overseas, buy goods or services internationally, or are studying abroad, you’ll need to find a safe and cost-effective way to pay overseas bills.

How does paying overseas bills work?

To pay an overseas bill, you’ll first need to choose an international money transfer provider. You could choose your bank to handle the transaction, but you’d need to be willing to settle for high fees and pretty dismal exchange rates if you take this route.

The next option is to use a specialist online transfer service such as CurrencyFair or FairFX. These reputable providers are based solely online and can provide secure transfers from your bank account to overseas bank accounts. They can also usually offer better exchange rates and lower fees than the banks, saving you a substantial amount of money.

Another option is to use a money transfer provider that offers a cash pickup option, such as Western Union or MoneyGram. Your recipient can then pick up the funds from the Western Union or MoneyGram location closest to them, often just a few minutes after you pay for your transfer. Other options for sending money overseas include banker’s drafts and PayPal.

The process of sending a transfer is simple. You may have to sign up for a free account with a transfer company before you can then provide details of how much money you’re sending, where to and in what currency. You can then pay for the transaction (including a transfer fee), and the provider will convert the Pounds you wish to send into the currency at your destination – for example US Dollars or Indian Rupees. The funds will then be sent to your beneficiary’s bank account or made available for cash collection.

Why might I need to pay an overseas bill?

You may need to pay an overseas bill for the following reasons:

  • You are renting a property overseas
  • You are paying off an overseas loan
  • You need to pay school or university tuition fees to an overseas educational institution
  • You need to pay a utilities bill
  • You are a business owner and you need to pay an international supplier
  • You may need to pay overseas staff members

What questions should I ask when comparing services?

Compare the following features of international money transfer providers to find one that meets all your transfer requirements:

  • How good are their exchange rates? Does the company regularly offer exchange rates in line with or better than the competition? How much can you save by sending a transfer with one company versus another? Do those companies with better exchange rates also charge higher fees?
  • How high are their transfer fees? You need to make sure you’re aware of all the fees and charges that apply to a transaction for you and your recipient.
  • Can you avoid paying a transfer fee by sending a larger amount? Some companies offer more cost-effective transfers when you send larger amounts of money.
  • Are there flexible transfer options available? Can you place a limit order (your transfer is only sent if the exchange rate you want to receive becomes available) or forward contract (secure an exchange rate today for a future transfer)?
  • Can you set up regular payments? Instead of entering all your transfer details every time you need to pay a bill, can you save time by setting up a recurring transfer? How big is the fee you’ll have to pay to do so?
  • How do you lodge transfers? Can you only place a transfer online or will you need to visit a branch? Are phone transfers available as well?
  • How will your beneficiary receive the funds? Will the provider send the money directly to your recipient’s bank account or will they need to visit a transfer agent to collect the cash?
  • How long will the money take to arrive? While some companies offer transfers within minutes to certain destinations, in other cases you will need to wait several business days.
  • Which currencies are supported? Does the provider allow you to pay an overseas bill in the currency you need to send?
  • How can you access customer support? Can you access customer support over the phone, via email and/or online? It’s also worth checking the hours when this support is available.

What are the pros and cons of paying bills overseas using an international money transfer?

Pros

  • Lower fees (compared to using your bank). You don’t have to send an international money transfer through your bank – there are plenty of options available that offer low or no fees.
  • Better exchange rates. Many banks will add a margin into the exchange rate they offer you. Plenty of money transfer services do this too, but it’s usually a smaller margin.
  • Set target rates or lock-in rates to save even more money. Good money transfer services like TorFX can help you to set rate targets that can trigger a transfer, or to lock-in good exchange rates today for transfers at a later date (great if you’re expecting exchange rates to deteriorate).

Cons

  • Fees will still apply. You’ll almost always need to be willing to shoulder a small fee or a margin added into the exchange rate – after all, specialist money transfer services might be cheaper than banks but they still need to turn a profit.
  • It’s a little bit more hassle. You’ll need to create an account with the money transfer service and fund your account before you can action your transfer. You’ll also need the account details for the overseas account you’re transferring to.

Some other aspects of the service are like-for-like when comparing with your regular bank. You can set-up recurring payments for example, which can make life easier.

Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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