Author, Andy Brown
I’ll explain what a money transfer company is, how the different types operate, what a transfer is likely to cost and help you find the best option for you.
What is a money transfer company?
Money transfer companies help people and businesses send money from one country to another.
They convert your funds to your chosen currency and send them to the recipient’s bank account.
The most important part of sending your money abroad is the currency exchange.
Each company will charge different exchange rates.
This determines the price you pay to send your money internationally.
Different types of money transfer companies
Many companies provide money transfers, but not all of them will be right for you.
If you need £200 travel money converted to Euros, for example, you’ll need to use a different company to someone who’s transferring £150,000 to buy a house abroad.
Here’s how you can find the best money transfer company that best suits your needs.
Money transfer companies fall into four different categories:
- Currency brokers
- Money transfer apps
- Money remittance companies
Banks are familiar names, and you’ll undoubtedly use them for many other financial services.
But for currency exchange, they generally don’t offer the best exchange rates.
They’d rather be spending their time managing mortgages, loans and business finance.
They aren’t in it to save you money.
With exchange rates from banks, you often get charges of 3%-4% on international transfers.
If you were transferring £100,000, a 4% margin would cost you a whopping £4,000.
You can find much cheaper options out there.
Also, the service from banks is not tailored towards what you really need.
They don’t want to take the time to understand and manage the finer points of your money transfer.
They want to offer you a large margin, get the transfer done and move on to something else.
If you have a large transfer to make, I’d recommend avoiding the banks.
Banks are much more suitable for smaller transfers and travel money.
Currency brokers are specialists in large international money transfers.
They are usually cheaper and offer better service than big banks.
As they operate at such large volumes, they’re able to get closer to the interbank exchange rate than other money transfer companies.
This is where you can save a lot of money.
Large international money transfers are likely to cost you far less with a currency broker than with a bank.
As well as being cheaper, many currency brokers can provide tailored guidance specific to your international transfer.
They can help explain the latest trends in the currency exchange market, whilst helping you navigate its daily ups and downs.
This could help you avoid any costly mistakes by making your transfer at the wrong time.
Most currency brokers have a minimum threshold for transfers and are better suited for large transfers.
Money Transfer Apps
Money transfer apps are the newest way you can now send money abroad.
You may also see them referred to as ‘fintechs’.
Some of the companies that have come to the fore are PayPal, Revolut, Paysend, CurrencyFair and Wise (formerly TransferWise).
However, more names and apps are entering the market all the time.
Each is looking to put their own spin on how to send money abroad.
Most money transfer apps essentially offer the same mobile-based service – just with a new fancy design.
If you find one you like, they can be helpful for smaller transfers.
In the unfortunate event something was to go wrong, sadly, the support is often non-existent.
If the worst were to happen, imagine being left with only a slick-looking interface.
No support, nobody to call and no indication of where your money is.
Often, the reviews for these money transfer apps reflect this lack of support.
Even when things don’t go wrong, getting a simple bit of advice can be nigh-on-impossible.
So, when you need to transfer a significant amount of money, many prefer to deal with a real human being.
It pays to have someone who knows the precise situation of your transfer, who can immediately tell you exactly where your money is at all times.
I would trust a person over a screen.
Money Remittance Companies
Money remittance companies can handle cash and are the quickest way to send money internationally.
Names like Western Union, Money Gram, Azimo and WorldRemit are money remittance companies.
Cash transfers are so quick because the funds don’t have to clear through the banking system.
However, they’re also the most expensive of the four types of money transfer companies.
Money remittance companies also have limits, typically of around £2,000.
If you need to quickly move less than £2,000 abroad, a money remittance company could be your best option.
How is a money transfer company different from a bank?
Unlike banks, money transfer companies specialise in currency exchange and transferring money from one country to another.
Banks have many different financial services that are the banks’ primary focus.
If they’re managing mortgages, personal loans, business loans and much more besides, your money transfer is, unfortunately, is not their priority.
This is why their exchange rates tend to be more expensive.
They charge a higher price to make your transfer worth their time.
A money transfer company only deals with international money transfers.
They work hard to provide better exchange rates and make the process quicker, easier, and more efficient.
Which is the best money transfer company?
The best money transfer company depends on your situation.
There is no one-size-fits-all, but below are the general guidelines you should follow.
For large international transfers, a currency broker is likely to be best.
Currency brokers can typically offer better exchange rates than the banks. There are no limits like remittance companies and they can offer better service than apps.
Banks and money transfer apps can be ideal for smaller currency transfers.
For smaller transfers, speed and convenience are often more important than better exchange rates. This is where apps and banks can be helpful.
If you have cash or need to get the money to someone extremely quickly, a money remittance company is your best option.
How to make sure your money transfer is safe
The most important thing when it comes to transferring your money safely is to use a company that is regulated by the Financial Conduct Authority.
The FCA assures that financial businesses abide by strict regulations to safeguard customers and their funds.
For money transfer companies and currency brokers, FCA regulations ensure that client funds are kept in separate and safeguarded accounts.
Check if a company is FCA regulated by searching for its name on the Financial Services Register.
About Key Currency
Key Currency is a British based currency broker.
We believe in supporting our clients all the way through the money transfer process.
You’re assigned your own currency exchange representative who is your sole point of contact.
They get to know the details of your money transfer.
This allows them to make things as easy as possible for you, whilst helping you make the transfer at the best possible time.
Plus, transferring a large sum of money without having support can be a lot of pressure.
Having a currency exchange representative that you can talk to over the phone can be a great comfort.
We don’t hide behind corporate names or logos. You can read find out about us
to see exactly who is dealing with your transfer.
We are an Authorised Payment Institution regulated by the Financial Conduct Authority (No.753989). For your peace of mind, we use safeguarded bank accounts for all money transfers.
And why not check out our 1,100+ 5-Star reviews on Trustpilot.
If you need to make a large currency transfer, get a quote below and compare our exchange rates.