Whether you’re supporting family, paying international bills, or funding investments abroad, sending money overseas should be simple and stress-free.
In today’s global economy, there are numerous ways to transfer money internationally from the UK. Online banking has now become the common means of transferring money. But there are a whole load of different apps, platforms and banks to choose from, each offering their own benefits and drawbacks.
There are many different services to choose from and some will be better than others for speed, efficiency, cost and convenience. Some methods for transferring money, for example, will incur an additional surcharge or service fee. Some will impose specific terms and conditions to open an account before transferring money like minimum deposit allowances or stipulations around where and how money can be transferred. Unlike many of these services, Remitly customers can transfer money internationally across over 100 countries with no hidden fees.
The upshot of all these choices is that it can be difficult to know where to start or which service is best for you. This guide focuses on the various methods available for sending money abroad, helping you choose the one that works best for your needs.
Bank Transfers
How Bank Transfers Work
A direct transfer from a UK bank account to an international one is the most common means of transferring money internationally. Typically, someone wishing to send money needs to provide the recipient’s details and relevant information such as bank account type and full name. When sending money internationally from the UK, the sender will need the recipient’s International Banking Number (IBAN) and their bank identifier code (BIC) or (SWIFT).
Banks and other financial service providers typically have a set procedure when it comes to sending large sums of money internationally. The same goes for recurring payments such as standing orders. This is to minimise the risk of loss and to protect customers’ money.
Pros of Bank Transfers
Traditional bank transfers are generally considered a safe and secure method of transferring money. Transfers are usually conducted by means of a reputable service provider such as a large bank. Many banks are FSCS protected, but some aren’t so it’s important to check first.
Most people already have a current account so transferring money using their existing bank account provides a quick and convenient method of transferring money. This is perhaps the reason why this is the most commonly used method.
Most big-name banks offer online banking and customers can use this service on their mobile device. This offers a great deal of convenience and simplicity to users.
Cons of Bank Transfers
Bank transfers can be slower than other methods, especially when large sums are involved. It’s not unheard of for some bank transfers to take 2 -5 business days for international transfers to go through. Take a look at our blog on process times for international money transfers here.
There are often higher fees associated with traditional BACS transfers. This is especially the case for non-SEPA (Single Euro Payments Area) payments. It’s therefore important to check first to see which zone the recipient’s bank is in before sending money.
As exchange rates fluctuate, there may be hidden costs involved or additional fees that may not be so obvious before sending. It’s important to check the current rate of exchange for the country you’re sending money to. It’s also a good idea to check with your bank if there are any additional fees associated with the rate of exchange before sending anything.
Digital Transfers and Online Platforms
How Digital Transfers Work
Digital transfers, sometimes referred to as ‘wire transfers’, are similar to standard bank transfers, but offer a few additional benefits when it comes to sending money internationally.
Customers can make use of online platforms, mobile apps and traditional online banking services to send money directly to an international account. The sender sends the money via a secure system to the provider, who then sends the money to the recipient.
Payments can be funded using standard debit or credit cards. There are options to link additional bank accounts and set up standing orders to feed into the account used to send the money.
Pros of Digital Transfers
Digital transfers benefit from competitive exchange rates and lower fees compared to normal banks. This makes digital transfer methods the ‘go-to’ when frequently sending money internationally.
Accounts can be set up quickly and easily and services are generally accessible 24/7. If you’re a small nosiness or an individual who needs to send money quickly, digital transfers are the way to go.
Cons of Digital Transfers
Digital transfers may require both the sender and the recipient to have digital transfer accounts. This can make things harder than traditional bank transfers where most people already have accounts set up.
Some platforms may charge higher fees for credit card payments. However, as savings can be made on exchange rates, it’s worth working out the difference saved compared to a bank transfer or other method.
Cash Transfer Services
How Cash Transfers Work
Cash transfers are generally a lesser-used method of transferring money. They’re often used for welfare and assistance purposes like humanitarian projects. Money can either be transferred using physical cash or electronically.
Cash transfers are a useful means of transferring money when the recipient doesn’t have access to a bank account or service.
There are three main types of cash transfers:
- Unconditional cash transfers: This is where funds are made available to those who don’t have to do anything in order to receive the money.
- Conditional cash transfers: This method requires the recipient to carry out instructions as part of an agreement before the money can be transferred. These transfers usually take place under a signed contract.
- Multi-purpose cash assistance (MPC): This method provides recipients with the funds needed to cover (fully or partially) their basic needs. As the name implies, these transfers are usually made with the purpose of covering multiple needs as opposed to one specific need.
Pros of Cash Transfers
Funds can be made available immediately and can be accessed from remote parts of the world where there may be limited banking infrastructure. This goes for individuals and organisations who may not have access to the internet or banking services. This is why cash transfers are frequently used over other methods when it comes to providing assistance or humanitarian aid.
Funds can be sent in the recipient’s local currency providing a greater degree of flexibility and more options to customers.
Cons of Cash Transfers
Typically there are higher fees involved, especially when it comes to same-day or expedited services. Not only this, but exchange rates may vary significantly. This can make cash transfers an expensive option for customers.
Cash transfers can pose logistical barriers when the transfer of physical funds is involved. This method will require the recipient to physically collect the money. Where large sums of money are involved, it can make this method less safe the digital and bank transfers.
Peer-to-Peer Transfers
How Peer-to-Peer Transfers Work
Peer-to-peer transfers allow the sender to transfer funds directly to the recipient via an intermediary platform. They are similar to digital and bank transfers, however, they vary slightly in the way the funds are transferred. Typically, they have an even faster processing time than digital and bank transfers. A common example of a peer-to-peer transfer is when your employer transfers your monthly salary.
The system works by matching senders with recipients, thereby minimising traditional banking fees.
Pros of Peer-to-Peer Transfers
Peer-to-peer transfers usually have transparent fees and offer competitive rates of exchange. As this system bypasses the use of an intermediary banking system, the processing time for transfers can be very quick. Peer-to-peer transfers are a secure and hassle-free method of transferring money. They are ideal for recurring payments or informal transfers between friends and family.
Cons of Peer-to-Peer Transfers
Peer-to-peer transfers are oftentimes not reversible. This means that if a transfer is made, there is no chance to cancel it or receive a refund. The method also relies on platform availability and providers can request a lot of information about the recipient to make a successful transfer. Start-up processes and account set-up requirements can also be time-consuming.
Money Orders and Postal Transfers
How Money Orders Work
Money orders are a method of transferring funds from a pre-specified amount of money. They are similar to checks, but they are pre-paid and guaranteed. Money orders can be purchased from a bank or postal service making this a suitable option for individuals or organisations without digital payment options.
Pros of Money Orders
Similar to cash transfers, money orders provide a straightforward solution for recipients in less digitally developed areas. Rural or remote areas of the world with little access to banking services for example, can benefit from this method. This method does not require either party to have a bank account and a paper trail provides additional security.
Cons of Money Orders
Money orders are often much slower when it comes to processing times. They can also be limited to opening times of postal and bank services. They typically come with higher fees for services, especially for international money orders and there are increased risks of delays or even loss in transit.
Choosing the Right Method for Your Needs
Consider Your Priorities
When choosing the right transfer method for you, it’s important to consider the various factors involved. Weighing up the pros and cons of each method is the best way to ensure your experience transferring money is stress-free.
Speed
Digital transfers are generally the fastest. Where physical cash is involved, additional processing times will apply and customers may be restricted to bank or postal service opening times.
Cost
Peer-to-peer transfers and digital platforms often offer the lowest fees. It’s important to compare services for things like exchange rates and service fees. Check beforehand to ensure you don’t pick up any hidden fees.
Convenience
Bank transfers and peer-to-peer transfers are used for large sums or recurring payments. Make sure you choose the right transfer method to avoid unnecessary hassle.
Recipient Access
Choose cash services or postal transfers for recipients without access to banking or online platforms. Depending on where you want to send the money, you will have to consider accessibility to banking services. For remote areas with little banking infrastructure or access to the internet, cash transfers may be preferable.
Tips to Save Money
Make sure to compare services for rates of exchange, service fees and any hidden costs. Many banks or financial service providers charge fees, but the amount they charge and what for varies dramatically. Consider where the recipient is when they will receive the money. Depending on their access to banking services, there may be additional fees for administration or collection.
Use services that specialise in international payments for better rates. These services oftentimes offer cheaper rates than conventional banks. They can also provide better advice and support when needed.
Key Takeaways
Whether you prioritise speed, cost, or convenience, there are numerous reliable ways to send money from the UK. From traditional bank transfers to modern digital platforms, each method has its advantages depending on your needs.
When choosing the right service for you, it’s important first to consider all the relevant factors before setting up an account. When sending money internationally, you’ll need to consider which region the recipient will receive the funds and their accessibility to banks and service providers.
You’ll also need to consider things such as the rate of exchange, account set-up fees, hidden costs and transfer fees.
Ultimately, it’s important to take the time to compare your options and choose a method that suits your budget and timeframe, ensuring your money gets where it needs to go safely and efficiently. The subject of transferring money internationally can be confusing at times. That’s why an easy-to-use, hassle-free service like Remitly can be a great choice to help remove some of that confusion.
