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What is an international money transfer? It’s the method for moving money internationally between two parties. This includes transfers directly through banks, digital money transfer providers, or foreign exchange brokers.
Whether starting a transactional business or growing an online business, knowing how to get funds overseas efficiently is important.
Transferring money internationally between banks can be more complex than domestic transfers. There are often hidden fees, potential delays, limitations, and exchange rates to consider.
Learn about different types of international transfers, how they work, and the information needed to send one.
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Unlike domestic transfers, where funds simply move between accounts within the same banking system, international transfers often require currency conversion and involve a network of banks to complete the transaction.
A common payment method for international bank transfers is via the SWIFT (Society for Worldwide Interbank Financial Telecommunication) messaging network.
When initiating a transfer, the sending bank sends a secure message through SWIFT to the recipient's bank (or to an intermediary (correspondent) bank if a direct relationship doesn't exist).
This message contains instructions to credit the recipient's account. The funds themselves aren't physically "sent" across borders; instead, accounts are debited in one location and credited in another. Each bank involved in the chain may deduct a fee, and the exchange rate applied can also impact the final amount received.
Transferring money internationally between banks requires:
When deciding on the type of international money transfer, there are various factors to consider. From how accessible the transfer type is to how quick, here are some key considerations.
Speed: | The speed of an international money transfer can vary significantly depending on the provider, destination country, currency, and time of transfer. |
Cost: | International transfers may be subject to transfer fees, exchange rate mark-ups, intermediary bank fees, and receiving bank fees. Senders should choose an option that is transparent about the costs. |
Limits: | There are no official or legal limits on how much money a person can send or receive internationally from the UK, but businesses sending transfers of 10,000 euros or more will need to register as a high value dealer.1 Additionally, individual banks and money transfer providers will set their own daily, weekly, or monthly limits. |
Security: | Be wary of scams that ask people to wire money through unusual means or pressure senders into a transfer. |
Providers: | International money transfers from the UK are offered by traditional banks and specialist services. Banks are convenient for existing customers but may have higher fees and less competitive exchange rates. Specialist services typically offer better rates and lower fees, focusing on currency exchange. |
Fees vary depending on a variety of factors, such as the chosen transfer method (i.e., in-person at the bank or an online payment method), the recipient's bank, and the currency exchange rate. Some common merchant fees include:
There are several ways to complete the international bank transfer process, each with varying speeds, fees, security, benefits, and potential limitations.
Here’s an overview of some of the most common methods of transferring money internationally between banks.
International bank transfers through linked bank accounts primarily refer to services offered by global banks that allow customers to view and manage their accounts across different countries and transfer money between them.
This often provides a more smooth and potentially cheaper experience than traditional SWIFT transfers between unrelated banks.
The core benefit is leveraging the bank's internal network, bypassing some of the intermediary steps and associated fees that typically apply to external international transfers.
Foreign accounts
Direct linking between different foreign banks is rare. However, specialised money transfer services and multi-currency accounts offer similar speed and cost-effectiveness by allowing users to hold various currencies and transfer using local payment rails in different countries.
It’s important to note that this isn't a direct bank-to-bank linked account, but rather a service that facilitates transfers into and out of the multi-currency balance.
For non-urgent transfers of money between banks internationally under certain amount.
They can offer good exchange rates, close to the mid-market rate, and transparent fee structures, making them ideal for sending money to family or paying overseas bills quickly and affordably.
For large international transfers, foreign exchange (FX) brokers like TorFX or OFX often offer more competitive exchange rates, closer to the interbank rate, and frequently charge no transfer fees, with their profit from a small, transparent margin on the exchange rate.
Beyond cost savings, these brokers provide personalised service, market insights, and tools like forward contracts to lock in rates for future payments, which is very important for significant transactions such as property purchases.
Tip: To find low international transfer rates, it's helpful to compare the total cost from multiple specialist providers, including upfront fees and the exchange rate markup. Consider timing the transfer for when exchange rates are most favourable.
Instant international transfers are designed for speed, allowing recipients to access funds typically within minutes.
These services are invaluable for urgent situations or when the recipient doesn't have a bank account. They rely on a vast network of physical agent locations worldwide.
Compared to bank-to-bank transfers or online-only specialists, instant transfers usually involve higher fees and less competitive exchange rates.
Here are the steps involved in using these services:
For faster payments, it’s important to understand some of the key mechanisms that influence international transfers. Banks use these core pieces of information to transfer money from one account to another, making it possible for the money to be received internationally.
A receiver should be able to provide the following information to the sender:
Whether expanding or just starting a new international business, it’s important to understand international payment integration strategies. Any hidden fees or unanticipated delays can impact the bottom line.
Transferring money internationally doesn’t need to be complicated. While money transfer services like PayPal have different protections and features than bank accounts, they can help simplify global transfers.
Enable international transfers with PayPal Open.