If you want to send money to a company or individual abroad, you will have to engage in an international money transfer.
In this article we show you how to send money abroad at low cost while ensuring you get the best deal when you transact.
1) How much do I have to send? Is it a large amount say in excess of £5000 pounds worth of currency?
2) Do I understand enough about exchange rates?
3) Do I have the correct bank details for the beneficiary account? (the account that I am sending the money to?
Once you feel comfortable and have the information on the above, you can then make a sensible decision about sending money abroad.
You have two main options when sending money:
1) Using the Bank (bad idea!)
2) Using a currency specialist (good idea)
Insert a table of the pros and cons when it comes to sending via the bank vs a currency specialist when you need to send money.
|Banks||Safe, and convenient||Rates can be as poor as much as 4% when compared to currency specialists. Banks also hide their fee within the rate of exchange.No guidance on currency exchange ratesSystems can be clunky and inefficient|
Some provide transparent pricing models, offering the interbank exchange rate to be visible online prior to booking with no additional hidden fees.
Dedicated industry professional that lives and breathes the foreign exchange market on hand for guidance when you are readySome offer online platforms to transfer money quickly and offer phone in dealing desks
Registered or Authorised with the Financial Conduct Authority and must safeguard client money
Some currency specialists although provide cheaper rates than the bank will not continuously offer consistent spreads and complete transparency.
Unless you have access to the interbank exchange rate to work out your calculations before booking or a fully transparent fee structure then avoid these types of currency specialists.
Once you have decided on the type of financial institution that you would like to send money with, you will need to go through the following steps:
This is the process of confirming your identity where you will be asked to provide some personal information about yourself and your transfer. An identity check will then take place. This is a mandatory exercise for all international money transfer companies to prevent the risk of money laundering and to adhere to strict anti-money laundering guidelines.
You should receive an online response in minutes of entering your information unless you are registering over the phone.
Once you have an idea of the amount of money you want to send abroad and the currency that you will be sending, you will need to fix an exchange rate with your bank or currency specialist. The currency that will be sent to the beneficiary account is the currency that you are buying and the currency that is going from the account you are sending from is the currency that you are selling. For example;
If I want to send euros to pounds, I will be sending euros to a euro account abroad and I will be buying pounds to pay for the transfer, therefore the currency exchange rate that I need to look at is EUR to GBP or EUR/GBP
You can then find this currency pair from the online platform provided by the currency specialist or obtain a quote from your dedicated account manager from a phone call. Transparent currency providers will provide you access to the interbank exchange rate prior to booking your exchange rate online with no hidden fees. Once the exchange rate is booked you are then either required to pay the selling currency amount directly into the client account of the currency specialist or bank or you can use a debit card to make payment.
Once the exchange rate is booked, the currency specialist or bank will send over a contract confirmation to you which will show the deal details.
You will then need to provide your beneficiary account details for where you are sending the money to.
The bank or currency specialist will then send the money abroad to the account you have specified.
In theory yes you can, but this is probably the worst manner to send money abroad. Why?
For example, let's consider that you would like to send pounds to a euro account abroad. Let's assume that you wish to send a fixed amount of pounds to the euro account abroad. The bank is under no regulation to quote you a rate and if you conduct this transfer via online banking, then they will simply apply the exchange rate that they see fit at the time that they process the transfer.
This is easiest way to lose money and we have come across clients who have lost significant amounts by changing money in this way. So avoid this method at all costs.
There are many companies that claim they offer a free service to send money. Sending money abroad is never free. It always costs money. Either the company is not being truthful or they are offering a promotion which is a loss leader to win business. They are either operating with huge losses with the likelihood that their business could fail or they have will soon start to charge a fee.
Using a transparent currency specialist who offers you access to review the interbank exchange rate in advance of booking online with no hidden fees can be the cheapest way to send money abroad.
In order to answer this question, you first need to get clued up on currency exchange rates.
To save the maximum amount of money compared to the banks use a currency specialist when sending money abroad.
Remember if you are sending a large amount of money. Currency exchange rates move as much as 1% and more within a day. Make sure your currency specialist has a dedicated account manager that can guide you with the latest economic data releases and views which are impacting your currency pair to help you make an informed decision before you decide to transact.
Just be aware of one extra piece of detail. Many currency specialists hide their fee within the rate of exchange so once you have obtained quotes from a variety of specialists, this can then change at the point of the transaction. This is not good, so in order to get the best exchange rate, go for the currency specialist that provides you with access to review the live interbank exchange rate prior to booking with no hidden fees. This way you can calculate the margin taken, so when you are quoted again you can review again to ensure the margin is fair.
You will need to provide the reason for your transaction, and make sure that you have the relevant bank details of beneficiary bank account.
The money will be received in the currency account of the recipient that you have provided when you decided to send money abroad.
There isn't an easy way to track the payment once it has been sent however if you have done your homework on the currency specialist that you are choosing then the payment will arrive. If there are issues, then make sure you have someone at the company that you can ring to chase up the whereabouts of the payment. They will then be able to trace the payment via the bank payment network.
Once the payment has been sent, certain systems such as the SWIFT payments network provide confirmation to the currency payments specialist that the funds have been sent. Additionally the currency payment specialist will provide you with email confirmation that the payment has been sent.
Yes there are, there are many countries that are sanctioned where money cannot be sent to. Always enquire with your bank or currency specialist to provide you with this information before you decide to send money.
The Currency Club is the UK leader in transparent foreign exchange, supplying foreign currencies and allowing private client members and corporates to send money abroad at the interbank exchange rate with no hidden fees.
If you are private individual click here to obtain a quote.
Are you a business looking to save money on your international payments or you would like assistance with hedging your currency requirements?
Then ring us today on 0207 723 7000 or send us a message below.