How to make an international bank transfer (in 4 simple steps)
Step 1 – Customer ID check
An ID check is a legal requirement for all new customers due to financial regulations.
You only need to do this once. Existing customers skip this step.
Most ID checks are done electronically now, which has made the process a lot quicker and easier.
Step 2 – Lock-in an exchange rate
Your bank or money transfer company will want to know the currency you have (to sell) and the currency you need (to buy).
You will then receive the latest exchange rate.
If you are happy to go ahead, the exchange rate quoted will be locked-in for you.
Shortly after, you will be emailed a confirmation with all the details of your transaction.
Step 3 – Pay for your transfer
You need to send your money in to pay for your international transfer.
If you use a money transfer company, you are normally given 1-2 working days to send your money in. Whereas if you use a bank, they will require the funds to be in your account already.
Step 4 – Your money is converted & sent out
Once your funds have arrived with your bank or money transfer company, they will convert the money into the currency you need and send it to the destination bank account you’ve requested.
How long does an international money transfer take?
International money transfers are mostly done using the SWIFT network – a secure payment system used to connect banks all around the world.
Both banks and money transfer companies use SWIFT.
An international money transfer within Europe normally takes 1-2 working days. Outside of Europe, it can take anything between 2-5 working days.
Converting your money into another currency is actually the quick part.
Most of the time taken is waiting for the recipient foreign bank to clear your funds.
It’s just a fact of life that some countries are faster and more efficient than others at processing international transfers.
Which is Cheaper: Banks or Money Transfer Specialists?
Using your bank for an international money transfer might seem an obvious choice.
But there are lower-cost options to send money internationally.
Money transfer specialists tend to be a lot cheaper and more efficient than banks.
I guess they wouldn’t exist otherwise.
We looked at the exchange rates and transfer fees charged by the UK’s big four banks.
As a ballpark, the UK banks are charging around 3-4% of your transfer amount. Money transfer specialists can cost up to 60%-70% less.
As an example, you could end up paying your bank £2,000 in fees and charges on an international transfer of £50,000.
Most of the cost is hidden in the exchange rate (not the fees).
The banks use a tiered system, meaning the exchange rate margin depends on the size of your transfer.
For smaller amounts, the exchange rate margin is a lot higher.
The best rates are reserved for transfers over £200,000.
And the fact is banks can be a bit of a pain to deal with.
If you have tried to use a bank before to send money overseas, you may have noticed the staff are not very knowledgeable about international money transfers.
That’s because they are trained in mortgages and savings products.
Money transfer specialists can offer a much more efficient and hassle-free service as they are focused solely on international money transfers.
How safe is a money transfer company?
If you’ve never used a money transfer company before, it’s natural you would want to know what security measures there are in place.
Fortunately, there are some clear rules and procedures that regulated companies must follow.
The most important of these rules from a customer’s point of view is to do with the ‘segregation’ of client money.
A money transfer specialist Authorised by the FCA must transfer any client money through a separate and safeguarded bank account. This means your money cannot be used for business purposes.
That’s why I suggest you choose a company that is Authorised by the Financial Conduct Authority (FCA).
To find out if a company is Authorised just type their name into the Financial Services Register and it will search for a match.
International bank transfers are often meaningful sums of money, so why risk using an unauthorised company.
How to avoid paying transfer fees
Most people hate paying fees – me included!
For international bank transfers, you will find that many of the big banks and money transfer companies charge you transfer fees.
However, there are some money transfer companies, such as ourselves, that do not charge any fees whatsoever.
The exchange rate we quote covers the cost of our service, so our customers don’t have to worry about paying any fees.
A transfer fee is a flat fee charged on every international money transfer.
Some banks even charge you twice – a transfer fee for both the sending and receiving bank.
But there are also other types of fees to look out for.
The UK banks tend to charge a priority payment fee to speed up your transfer and also add a fee if you want to have your payment tracked and traced.
One of the frustrations for customers is when these fees pop-up after you’ve entered all your payment information. At that point, you may feel you’re too far into the process to start over somewhere else and then reluctantly pay the fees.
Getting a great rate on your international money transfer
The most important cost of an international transfer is usually the exchange rate.
Even small fractional moves in the exchange rate can have a significant impact on the money you receive.
On an international transfer of say £75,000, a move in the rate of just 1% up or down, makes a £750 difference to you.
A swing of 1% can often be a daily event.
Over the course of several weeks, rates can move a lot more.
It’s why timing is important.
But how do you know when it’s a good time to exchange your money?
Most people have neither the time or inclination to watch exchange rates all day.
It’s not their field of expertise, and they would rather be doing other things.
That’s why you could benefit from getting some market guidance from someone who deals with the foreign exchange markets every day.
We monitor the market for you and let you know when the rate moves in your favour.
Why you should careful of exchange rates you see online
Looking on the internet for the best exchange rates can be a minefield of misinformation.
There are so many free websites now that provide a feed to live exchange rates.
But there’s a problem.
Most of the exchange rates you see online are not actually available to consumers.
Buried somewhere on these sites is normally disclaimer with words along the lines of the rates shown are “not achievable” or “for information purposes only”.
You are seeing something known as “interbank rates”.
Interbank rates are like a wholesale benchmark rate between the big global banks.
Not even major corporations or money transfer specialists can trade at interbank rates.
If you want to get a real rate, I suggest you request a quote from an actual provider such as a bank or money transfer specialist.
Are money transfer companies all the same?
I appreciate that all money transfer companies can sound the same.
But there are some key differences.
Some focus on smaller micropayments to developing countries, like Western Union, MoneyGram, Ria, and WorldRemit.
Others are ‘online-only’ platforms or apps. The bigger names are PayPal, Transferwise, CurrrencyFair and Revolut.
You pretty much do everything yourself, but it’s not really possible to speak to anyone.
They do, however, offer webchat and email support.
There are also companies, such as Key Currency, that deal with larger sums or one-off payments.
Our service suits customers who want some human contact and personal guidance.
For large currency transfers, many customers want the peace of mind of having someone they can speak to.
If there is ever a problem, you can call and speak directly to them.
I guess it comes down to the individual and what they prefer.
Quick Summary: International Bank Transfers
- You can use a bank or money transfer specialist.
- It takes anywhere between 1-5 working days.
- You can avoid transfer fees by using a money transfer specialist.
- Use a company Authorised by the FCA.
Who are we?
I am one of the directors at Key Currency.
We are a leading money transfer specialist serving customers in the UK, EU, Middle East and Australasia.
Our rates are highly competitive, and we charge you no fees.
As part of our service, we can also discuss your requirements and agree on the right time to exchange your money, rather than using a bank or online-only system, and having to accept whatever rate they give you on the day.
In terms of regulation, we are an Authorised Payment Institution (Financial Services Register register No. 753989), so all international money transfers are conducted through safeguarded client accounts.
We are committed to providing our customers with value for money and outstanding service.
Our company has attained a 5-star customer rating on Trustpilot, based on over 700 reviews.
If you would like to compare us to your bank or existing provider, simply request a free quote below.