International Money Transfer: Best Ways To Send Money Abroad

We looked at some popular money transfer providers to see how their services stack up. We considered the range of currencies on offer and countries you can send money to, plus the transfer fees. You can read our full methodology below.

A money transfer is simply a way of moving money from one place to another. If it’s an international money transfer the money will go overseas and it may be converted into a different currency.

Money transfers can sometimes be called remittance payments, which simply refers to money being sent across international borders.

The UK sends twice as much money abroad as it receives, according to the think tank the Migration Observatory, based at Oxford University, and the UK is the 14th largest remittance sender in the world with an average annual outflow of £8.1 billion, according to MoneyTransfers.com.

Migrants living and working in the UK send home 22% of their annual income on average, according to Western Union.

When you make an international money transfer the cash can be transferred from one bank account to another, this might be between accounts of the same bank or to a different bank.

Payments can also be made from credit or debit cards with the money converted and sent abroad to a recipient account.

Most money transfers are now digital or electronic and can happen within minutes. It is also possible to send money via an electronic transfer and the recipient can pick up the physical cash somewhere else in the world. In other cases you can transfer money which can be put onto a mobile top-up for someone else in another part of the world.

International money transfers are sent for a wide variety of uses. Research by Western Union published in July 2023, for example, found that remittances sent by migrants working in the UK were used predominantly for healthcare (61%), followed by food and groceries (59%), housing/accommodation costs (39%) and education (38%), as the following graph illustrates.

A forward contract means you can fix into a good exchange rate in advance of sending the money. It can be highly beneficial, particularly if you’re making a very large money transfer, for example to buy a property overseas.

Fixing into a favourable exchange rate in advance can save thousands of pounds on the transaction if the rate of exchange subsequently falls. However, not all foreign exchange services offer forward contracts.

How much it will cost to transfer money overseas will depend on a range of factors. But whether you use your bank or a specialist foreign exchange (FX) provider you will need to convert your pounds (Sterling) into another currency. Some providers will offer a better exchange rate for the currency switch than others – so if your rate is not as competitive you could lose money in the exchange.

Added to this there will usually be fees charged on top for the transfer. These can vary widely depending on the provider and also by the amount of money you want to send, how quickly you want to send it and the method of the transfer (for example by bank transfer or paying by credit card).

While some providers charge higher fees for larger money transfers, other companies may reduce their fee for larger transactions and have bigger fees for smaller money transfers.

This is another reason why it pays to shop around. One foreign exchange company may offer great value for one person and their transfer, but for a different type of currency transaction they could be less competitive compared to other providers.

If you have a large amount of money to transfer, such as for a property purchase or for an overseas wedding, for example, not only will you want to be sure you’re getting a competitive exchange rate on the currency but the safety and security of your transfer is likely to be a priority.

Even small differentials in the exchange rate between providers can add up to a much bigger cost if you don’t opt for a competitive deal. Compare a range of providers before going ahead, remembering that exchange rates are changing all the time.

Consider getting a quote for the transfer from your bank. The mainstream banks tend not to offer the best exchange rates, but your money is protected under the FSCS, which may not be the case with most FX companies. Remember to ask about fees as well as the exchange rate when comparing to other specialist providers.

Finally, think about getting a forward contract if the exchange rate looks relatively favourable now but you don’t need to send the cash immediately. By doing this you could lock into a good rate and save yourself money if the exchange rate moves against you.

Using your UK bank or building society for an overseas transfer means it’s protected by the Financial Services Compensation Scheme (FSCS). However, if you use a specialist FX broker, you are likely to have less protection if the company lets you down. FX brokers are not banks, but electronic money institutions so customers’ money is not protected by the FSCS.

Currency brokers can be ‘authorised’ by the Financial Conduct Authority (FCA) or just ‘registered’. Authorised firms offer a higher level of security for customers because they are obliged to keep clients’ money separate from the company’s own funds – this will usually protect you if the firm goes bust (although there are not the same guarantees as with the FSCS). With a company that’s just on the FCA register, your cash could theoretically be lost if the company went into administration.

Here are some ways to ensure your transfer is as safe as possible:

• Always check the credentials of the FX company and its FCA authorisation
• Check the Trustpilot ratings and reviews
• Be wary of scams, particularly phishing emails or suspicious texts from companies you do not know

There are a number of advantages and disadvantages to using money transfer providers compared to using a high street bank for the transfer.

Pros:

• Competitive exchange rates
• Choice of transfer methods
• Lower fees (sometimes fee free)
• Use forward contracts.

Cons:

• No FSCS protection
• May not cover all currencies and countries
• May have to register or set up an account to send money.

Specialist money transfer companies are not the only way to send money overseas, although often they will be the lowest cost way. Other options to compare might include:

Your bank account

Sending money abroad using your UK bank account is easy and convenient, as well as safe. You’ll normally be able to do the transaction online. But the exchange rates are usually poor, and there are often high fees too.

The one scenario where using your bank might be a decent option is if you have an account with a UK bank that has branches in the other country too, such as Spanish-owned Santander. Some banks allow free transfers in this situation. This could be helpful if you have an overseas holiday home or split your time between two countries.

A multi-currency bank account

A multi-currency account lets you hold money in several currencies at the same time.

Most major banks, such as Barclays, Natwest, Lloyds and HSBC, offer foreign currency or multi-current accounts, generally for the world’s most used currencies (E.g. Sterling, Euros, US dollars, Australian dollars, Swedish Krona etc).

These accounts let you manage payments in a foreign currency instead of opening a new bank account overseas. However, most multi-currency accounts tend to be aimed at high net worth customers or businesses, so not everyone will be eligible.

On the high street

Services such as Moneygram and Western Union have their advantages – but they’re not cheap. You can use these services if you need to pay in cash or if the recipient doesn’t have a bank account.

The receiver can pick up the cash quickly (in minutes) in a shop in an emergency. Both have a huge network of physical premises, including relatively remote locations. They can both be a good option, for example, if your child is on a gap year and is robbed of all their stuff, as you can send them cash quickly.

However, fees can be very high, exchange rates uncompetitive, and maximum limits low.

PayPal

PayPal is an easy option if both you and the recipient have a PayPal account, allowing consumers to transfer money between more than 200 different countries. But PayPal is an expensive way to send money abroad as the foreign conversion fees tend to be among the worst out there.

We analysed a range of money transfer services to arrive at our Forbes Advisor star ratings. We looked at the services and currencies on offer, the different countries customers can send money to and the methods of transfer, the fees charged (any introductory offers) and the speed of transfers.

Where possible, we did a rate spot check (in August 2024) to compare what £1,000 Sterling would buy when converted into euros with each provider. All provider websites were checked, where the information was easily available, within five minutes of each other.

We also looked at customer experience ratings on Trustpilot (October 2024), where there were at least 1,000 reviews, to arrive at our own Forbes Advisor star ratings for the different companies.

All companies in our listings are authorised by the Financial Conduct Authority under electronic money regulations.

However, as these companies are not registered banks it means customers’ money is not protected under the Financial Services Compensation Scheme (see more in ‘How safe are overseas money transfers? below).