International Money Transfers (explained in 4 simple steps)

How to make an international money transfer

If you need to make an international money transfer, you can either use a bank or a money transfer company.

Step 1 – Customer identification check

All new customers will need an ID check due to global financial regulations.

This only has to be once.

Existing customers can skip this step.

These days, most ID checks are quick and easy. Your passport number and address are often all that’s needed.

Step 2 – Lock in an exchange rate

Before you can transfer money internationally, you need to lock in an exchange rate.

A bank or money transfer company will quote you their latest rate based on the amount of currency you have and the currency you need to buy.

If you are happy to proceed, the exchange rate is locked-in for you.

Following that, you will be emailed a confirmation with the details of your transaction.

Step 3 – Send in your money 

Banks require your money upfront, but money transfer companies can agree on an exchange rate before you send in your money.

This can be handy if you see a great exchange rate and don’t want to miss it.

You will normally be given 1-2 working days to send your money in after securing a rate.

The confirmation email will include the amount you need to send in and where to send it.

Step 4 – Your money is converted & sent 

Once your money is received by your bank or money transfer specialist, they will convert it into the currency you need and transfer it to the bank account you’ve requested. That’s it.

---

---

How long does an international money transfer take?

It takes 1-3 working days for international money transfers within Europe. 

Outside of Europe, it can take between 2-5 working days.

The reason transfer times vary is due to factors such as different time zones, whether your funds arrive in the morning or afternoon, and the efficiency of the recipient bank.

---

Banks vs money transfer companies compared

Banks used to have a monopoly on foreign exchange.

Fortunately, things have now changed for the better.

Money transfer specialists will do the same job as the banks but at a much lower cost.

Both money transfer specialists and banks use the same secure SWIFT payment network to send money internationally  – but can undercut the banks on charges as they have far lower overheads.

It’s pretty obvious why banks can’t offer you the best deals on international money transfers – they can’t.

With billions in annual overheads, they have to charge accordingly.

As a ballpark, the big UK banks charge 3-5% in exchange rate costs. 

What that means is if you made a transfer of say £50,000; you could end up paying your bank £2,500 just in exchange rate costs!

The exact cost will depend on the bank, the amount you send, and the currencies involved.

Why pay more than you have to? Get an alternative quote from a money transfer company.

---

5 reasons to avoid your bank 

1. It’s not their area of expertise
   

   ---

   
   
2. Their exchange rates are uncompetitive
   

   ---

   
   
3. Banks charge transfer fees
   

   ---

   
   
4. They won’t help you with timing
   

   ---

   
   
5. You are not their priority

---

International money transfer fees (& how to avoid them)

Everyone hates paying fees.

And most of the time, they are unnecessary.

In the UK, most of the big banks charge you a fee every time you make an international transfer.

Here’s a summary of fees from the UK’s biggest banks:

• Barclays: £25 (standard) or £40 (faster) if you use a branch. They also charge the recipient £6.
  

  ---

  
  
• Lloyds: £9.50 whether you use a branch or go online. The recipient is also charged £12.
  

  ---

  
  
• Natwest: £15 for amounts below £5,000, 0.3% of amount if over £5,000 (max £40).
  

  ---

  
  
• Santander: £25 flat fee for branch or online.

As you can see, some of the banks charge both the sender and the recipient!

While the transfer fees don’t look massive, a lot of customers think that’s the only cost of their international transfer.

They don’t realise these fees are in addition to the exchange rate charges.

There is a really easy way to avoid paying these fees – don’t use a bank.

Some money transfer specialists, such as Key Currency, don’t charge any fees on international money transfers.

---

An international bank transfer will usually arrive at the recipient within one to five working days. This is usually quicker for transfers within Europe, where it can sometimes be as quick as one to two working days.

Converting your money into another currency is the quick part.

Most of the time taken is waiting for the recipient’s 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 cross-border transfers.

---

What details are needed for an international bank transfer? 

International bank transfers are mostly done using the SWIFT payment network – a secure and reliable system used to connect banks all around the world.

Both banks and money transfer companies use SWIFT.

To make an international bank transfer you will need to provide the following details and information about the recipient:

• Their BIC or SWIFT code.
  

  ---

• Their bank account number or IBAN.
  

  ---

• Their full name.

You will also need to provide your personal and bank account information.

Finally, some money transfer providers may ask you for a reason for the international bank transfer you’re making but this is a common protocol and nothing to worry about.

---

---

Which is Cheaper: Banks or Money Transfer Specialists for international bank transfers?

Using your bank for an overseas 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 into the exchange rates charged by the UK’s big banks.

As a ballpark, the UK banks are charging around 2-5% 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 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 money transfers.

That’s because they are trained in mortgages and savings products.

Money transfer specialists can offer much more efficient and hassle-free service as they are focused solely on international bank transfers.

Why banks may not be the best option

1. It’s not their area of expertise
   

   ---

2. Their exchange rates can be uncompetitive
   

   ---

3. Banks charge transfer fees
   

   ---

4. They won’t help you with timing
   

   ---

5. You are not their priority

---

---