Transferring money overseas involves a few more steps and costs than transferring domestically.
Whether you’re looking to send money abroad for the first time or you’re wondering how to save money on your next transfer, these are the main things to remember.
Money transfer providers are often cheaper than banks
To make a transfer from your bank account to one in another country, money often needs to pass through a network of foreign correspondent banks before it reaches its final destination, each of which takes its own fee.
That’s why high street banks often charge higher fees and transfers than specialist money transfer providers – also known as currency exchange brokers or currency exchange specialists. Some of the most well-known providers include Western Union, MoneyGram, Ria and Wise.
Through a series of partnerships and an established payments infrastructure, these companies can disburse money abroad quickly and usually at a lower cost than high-street banks.
Compare exchange rates and fees to get the best deal
The reality is that money transfer providers need to get paid for their services. Usually, they do this by adding additional costs to your transfer.
When you compare providers, remember that there are really two things that make up the cost of sending money abroad:
- The fee: a fee for making the transfer. Depending on the provider, this could either be a flat fee or a percentage of the transfer. In some cases, providers may not charge a fee at all.
- The margin: In addition to the exchange rate, providers will often charge an additional margin, which is a markup on the currency exchange rate.
Providers will usually apply one or both of the above to your transfer, and it’s important to factor that into your decision. For example, if you’re sending a higher amount of money abroad, it might work out cheaper to opt for a provider with higher fees but a lower markup on the exchange rate than another provider.
To simplify things and compare costs quickly, just ask the following: if I transfer X amount with this provider to a person in another country, how much will that person receive?
If that sounds like a lot of calculations, don’t worry. Through our money transfer comparison tool, FXCompared can show you the amount that will be received (including fees and FX margins) across the top providers for your chosen money transfer.
This will help you find the best possible deal in seconds.
Timing can make a big difference to transfer speed and cost
As well as picking the right provider, you also need to think about when you are sending money. This is because exchange rates can fluctuate for all manner of reasons during the month, which in turn can affect how much it costs to send money abroad.
Some of the things that can affect currency exchange are as follows:
- Interest rates: the value of currency in a country can rise as interest rates increase.
- The economy: if a country’s economy is struggling or in a recession, this may affect the value of its currency.
- Political stability: Equally, if a country is politically stable, the exchange rate of its currency is likely to be higher than if it saw governmental disruption.
Be mindful of the fact that rates and the speed of transfers can be affected during particularly busy periods.
For example, Ria reports that people are generally more likely to transfer money during the working week, with Friday being the busiest day. In addition, lots of people tend to transfer money at the start and end of the month
On the other hand, Mondays and the weekend tend to have lower numbers of transfers. You may see rates fluctuate less on days that have lower numbers of transfers on them.
You should also remember that even if currency exchange specialists promise a faster transfer, your bank will still need to be involved for the initial payment step. This means that if you submit a request outside of the bank’s opening hours, it may not be until the next day that the money is transmitted.
If you know you are going to be sending money abroad regularly (i.e. every month), it’s definitely worth comparing rates on different days of the month to find out how they change and when you are likely to get the best price on your transfer. FXCompared’s comparison tool makes this easy.
Check you are using a reliable provider and avoid scams
Unfortunately, scams are frequent in the international money transfer space. It can be very difficult to recover money that has been sent abroad.
Because money transfers move fast and there often isn’t a way to reverse them once the process is underway, it’s important to be vigilant about a) the person you are sending money to abroad and b) the provider you are using to do it.
If you can help it, you should avoid sending money to someone you haven’t met or spoken to in person. If for some reason it isn’t possible to speak to them beforehand, avoid sending large amounts all in one go.
There are a number of common scams for sending money abroad. For example, con artists could contact you pretending to be a family member living abroad who has had an emergency; offer investment opportunities that promise quick money fast; or threaten to blackmail you over “sensitive information” they have on you.
If you receive messages like these out of the blue, think rationally before sending any money. Contact family overseas, do research to verify senders and check messages are legitimate. If something seems too good to be true, it probably is.
You should never send money to someone who is threatening to extort you and if emails persist and you feel unsafe, speak to the authorities. In any case, you should alway be wary about sharing personal information online and be careful when connecting with other people on social media, particularly if you haven’t met them.
As well as the person you are sending money to, it’s important to always use a reputable money transfer provider. You can use websites like Trustpilot to vet providers beforehand. Specifically, look to see if they offer good customer service and offer clear guidance on what to do in the event a money transfer goes awry.
FXCompared always shows reputable, established international money transfer providers in its comparisons. You can find out more about some of the leading providers in our Company Reviews section.
Make sure you provide the right information
When you’ve actually selected the money transfer provider you want to use, you’ll need to provide them with the right information. This is super important, as giving incorrect info can lead to a delay in your money transfer going through, or could even lead to your money ending up in the wrong person’s account.
So what information do you need to transfer money overseas? Typically money transfer providers tend to require the following:
- The name of the recipient
- The name of the recipient’s bank
- Your recipient’s address
- Your recipient’s International Bank Account Number (IBAN): The IBAN essentially helps banks overseas to identify bank accounts, which helps make sure payments end up in the right location.
- Your recipient’s Bank Identifier Code (BIC) or SWIFT code: These are essentially the same 8 or 11-number code, which in tandem with the IBAN is used to identify bank accounts.
If you end up getting the payee’s details wrong or your chosen recipient hasn’t received their money, contact your money transfer provider as soon as possible to maximise your chances of getting your money back.
Use a comparison tool when you transfer money overseas
In short, when looking to transfer money overseas you should always:
- Remember that you could save money with a transfer specialist
- Compare exchange rates and fees to get the best deal
- Find out the best possible time to make your transfer
- Check the reliability of your provider, and be wary of scams
- Make sure you provide the right information
Based on world-leading remittances data, FXCompared compares the best international money transfer providers – including Western Union, MoneyGram, Ria, Xoom, Wise and many more – to find you the best possible deal on your chosen transfer.
Simply head to our money transfer comparison tool and enter the amount you’d like to send abroad, along with where you are sending it to and from, to receive a list of the best offers and providers for your transfer.
Save money on your international money transfer: use our free comparison tool to compare money transfer providers in seconds.
