How businesses can send money to and from the UK | moneyfacts.co.uk

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Published: 10/12/2020

At a glance

  • Being able to send money abroad quickly, cheaply and safely is a core part of many business activities.
  • International money transfers can be made in a variety of currencies, with the foreign exchange provider converting your local currency to that of the recipient.
  • There’s always the option of using your bank to arrange international money transfer, but it’s often cheaper and more efficient to make the arrangements through a specialist transfer service.

Whether you run a small import/export business which wants the quickest, easiest and most cost-effective way to make international payments, or you're the CFO of a larger business that requires highly tailored strategic hedging advice with fast, cost-effective execution, you'll need an unbeatable foreign exchange provider. Our preferred currency broker, Xe Money Transfer, can provide that kind of service, but first, let’s take a closer look at how businesses can send money to and from the UK, and why it’s so important to find the right broker to meet your needs.

What is international money transfer?

At its most basic of levels, international money transfer is the transfer of funds overseas – but there’s a lot more to it than that. As you’re not sending money to an account in the UK there are conversion rates to consider, together with commission fees and transaction costs, which in some cases can be significant. It can cost a lot more than transferring money to UK-based accounts, which is why finding the right service provider is key, particularly for businesses which are likely to use such services on a regular basis.

How do I transfer money overseas?

There are several ways that you can transfer money internationally, including:

  • International money transfer firms / foreign exchange brokers. These are companies specifically designed to send money overseas, and as such they offer competitive rates, low fees and high levels of security. Ideally suited to business money transfers, these firms are used to handling large transactions, and often use online systems to streamline the process.
  • High street transfer services. Another option suited to business transactions, high street transfer services can be quick, but tend to levy higher charges, particularly on smaller amounts.
  • Bank transfers. Typically an option for personal or ad-hoc business transactions, bank transfers can be arranged via your usual bank, though the convenience comes at a cost of higher fees and poor exchange rates.

 

For business purposes, utilising the services of a specialist international money transfer firm is normally preferred. Fees tend to be cheaper and exchange rates more favourable, and with secure online processes, the entire transfer process can be completed quickly and easily.

All you have to do is sign up to create an account, get a quote and, once agreed, transfer the money into the account in sterling. Then, your chosen FX provider will convert the funds into the required currency and send it to the bank account specified. Many providers – including Xe – even have app capability, allowing you to conveniently transfer funds wherever you are.

How long does it take to transfer money abroad?

This will depend on the service you use. Bank transfers, for example, can take as long as six working days, while high street transfer services may only take a couple of days to complete. However, specialist foreign exchange brokers can often ensure your money arrives the same day – and in some cases, payments can be made in a matter of seconds.

What costs do I need to think about?

Unlike with transferring money to UK-based accounts, international money transfer often comes with a lot of additional hidden costs which you need to be aware of. These can include transaction fees (some providers charge a fee for every transfer) and commission costs (additional costs for the provider itself, often levied by banks), while some charge receiving fees to the recipient that you may want to cover.

Then there’s the exchange rate to consider. Even a difference of a few percentage points can add a lot to the cost of large business transactions, so it’s a good idea to keep an eye on current exchange rates, bearing in mind they can fluctuate in a matter of hours. Different providers will always offer different rates, too, with banks again tending to be the least favourable; this is another reason why opting for a specialist transfer service is often recommended, with Xe in particular offering consistently bank-beating exchange rates and no hidden costs, boasting free international payments on amounts of £3,000 or more.

Can I set an exchange rate now and transfer money later?

If you’re planning your international money transfer in advance – which, if you run a business and have set payments to make, could be likely – it’s perfectly possible to lock in today’s exchange rate and transfer the money later, and to fix a future payment at the current rate so you know exactly what the cost of that payment will be.

This is what’s known as a forward contract and allows you to plan up to 12 months in advance, and for this reason can be particularly suitable if you think exchange rates are exceptionally good at present and may falter in the future – but of course, rates are volatile and could just as easily move against you.

How do I choose an international money transfer provider?

As well as analysing the rates offered, you’ll also need to consider how much money you’re sending, with some offering higher fees for smaller amounts and others only offering transfers above a certain amount. For regular payments, you may want to talk to your bank to see if they can offer individual deals, though in many cases a currency specialist could still prove beneficial. It’s often more cost-effective to transfer money in larger quantities rather than several small payments, but a good rule of thumb is to work out how much money you’ll be left with after fees and charges to ensure you’re getting the best possible deal.

Also, make sure to check that the currency and country you’re transferring to is available with your chosen international money transfer provider – XE Money Transfer, for example, accepts payments in more than 139 currencies to over 220 countries and territories – and always check reviews of your potential provider so you can be confident you’ll get a great level of service.

You may also want to consider the kind of additional services that can be offered with modern international money transfer providers. Some, such as Xe, offer currency converter tools that can be seamlessly incorporated into your CRM environment, together with apps and currency bots that can allow you to access live exchange rate information and price calculators across a range of digital platforms, including Alexa, Slack and Facebook.

How safe is it to send money abroad?

All firms that handle overseas money transfer have to be either authorised by or registered with the Financial Conduct Authority (FCA), offering certain regulatory protections. Firms that are authorised must keep your money ringfenced away from their own company funds, giving you a greater likelihood of having your money returned should the firm go bust. All larger international money transfer firms have to be authorised by the FCA.

Firms that are only registered with (as opposed to authorised by) the FCA can choose how they handle your money and don’t have to ringfence it, but they may still choose to do so. They still have to show the regulator that they’re based in the UK and that none of their managers have criminal convictions related to financial crimes. Smaller firms tend to be registered rather than authorised.

You can check the status of a firm using the FCA’s register, and can refer to online reviews to check the level of service offered by different firms. It’s also worth noting that international money transfer services are not included in the Financial Services Compensation Scheme (FSCS), though if the firm is authorised with the FCA rather than registered, your money is as protected as possible. Our broker partner, Xe Money Transfer, is fully authorised with the FCA.

Why Xe?

Xe understands that it's not enough to simply offer you unbeatable exchange rates. That's why competitive rates and exceptional service are its trademarks. In fact, everything it does is founded on one simple principle: reputations cannot be bought, but are hard-earned over time. Whatever your foreign exchange requirements, we're sure you'll find Xe stands out from the crowd.

Online international payments

Built from its experience of transferring over £100 billion in foreign exchange, Xe has created a simple, online international payments service.

Designed for businesses which transact £1 million or less of foreign exchange a year, Xe Money Transfer allows businesses to convert £50 - £300,000 at the touch of a button, and gives you the quickest, easiest and most cost-effective way to pay overseas suppliers and staff, receive international payments, settle invoices and conduct business abroad.

Additional benefits include:

  • Consistent bank-beating exchange rates.
  • The ability to move money overseas and pay international suppliers in seconds, ensuring your money arrives on time every time.
  • No hidden charges or fees.
  • Free international payments on amounts of £3,000 or more so you avoid unnecessary bank charges or having to speak to your local bank.
  • Online account management and the ability to track payments 24 hours a day, 365 days a year.
  • The app lets you transfer money wherever you are, and with additional tools and plugins (including our interactive currency converter, Shopify plugin and currency bots that let you access live exchange rate information and purchase price calculations across a range of digital platforms), you’ve got a conversion partner that can work with you and your business.
  • Xe Money Transfer's security technology, Norton security, is used by 97 of the world’s top 100 banks, giving you complete peace of mind.
  • Peace of mind from a brand you can trust. Xe Money Transfer is authorised by the Financial Conduct Authority under the Payment Services Regulation 2017, registration number 462444.

Corporate FX Dealing

Simple, fast, cost-effective and highly tailored to your needs, with each dealer servicing fewer clients than the banks, Xe Money Transfer provides a level of proactivity and personal service that banks simply can't match. As your eyes and ears in the market it will provide you with all the tools, information and expertise you need to react rapidly to changing market conditions. So you can take advantage of the best rates and, more importantly, protect your business when rates are moving against you.

And, as one of the few non-bank members of SWIFT, it aims to surpass the payment turnaround times of your existing provider, while offering access to free international payments and a secure and convenient online payments service. So you can process international payments with ease and manage your account 24/7, wherever you are in the world.

To help identify whether or not your current provider is really providing the most efficient and cost-effective service, optimising the rate and timing of your transactions, Xe Money Transfer's currency specialists can undertake a quick, highly transparent and cost-free analysis of your business' historic currency trades.

Xe's services are fee-free and easy to use, but the pay-off is exceptional. And there's absolutely no obligation to trade. Clients only place their business with Xe Money Transfer if they are able to identify significant benefits. That's why their 4,000 corporate clients are amongst the most loyal in the UK.

Is it safe to transfer money through Xe?

Xe takes the security of all overseas transfers and transactions seriously, utilising the world-respected Norton security systems to protect your personal details and funds. Xe is authorised by the FCA under the Payment Service Regulations 2017 for the provision of payment services.

Companies authorised by the FCA must meet strict capital adequacy and business practice rules, as well as complying with Payment Services Regulation and the FCA’s Conduct of Business requirements. In addition, Xe holds all client monies in segregated client account trust accounts – meaning that they are held separately from the company funds and therefore are safe in the event of any problems. For extra security, Xe also holds professional indemnity insurance.

What is the maximum amount of money I can transfer?

For Xe, the maximum that can be transferred online is $500,000 US Dollars (or the currency equivalent). There is no maximum limit to what you can transfer with Xe using other methods.

How do I transfer money with Xe?

Step 1: Sign up. With Xe, you can set up your account online or over the phone.

Step 2: Quote. Simply tell Xe how much you're transferring, which currency it’s in and who to send it to. You’ll be given a quote including all associated costs.

Step 3: Send. Once you've agreed on a transaction you’ll need to transfer the money into your online account. Then, Xe will convert this to the relevant currency and send it to the required bank account, as per your transfer instructions.

Step 4: Track. Keep up to date with the progress of your transaction online 24 hours a day, seven days a week. Xe also sends notifications via email and SMS, so you know exactly where your money is.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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At a glance

  • Being able to send money abroad quickly, cheaply and safely is a core part of many business activities.
  • International money transfers can be made in a variety of currencies, with the foreign exchange provider converting your local currency to that of the recipient.
  • There’s always the option of using your bank to arrange international money transfer, but it’s often cheaper and more efficient to make the arrangements through a specialist transfer service.

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