What’s the best way for a business to transfer money to and from the UK?
It might not seem expensive to move money abroad, but when you’re doing it day in, day out through your business, the costs quickly add up. Our guide explains how to make foreign transactions as cost-efficient as possible.
Key takeaways
Foreign exchange specialists often provide more competitive rates on business transfers than high street banks
Transferring large amounts can lead to better rates and lower charges rather than regular, smaller payments
You can often lock in favourable exchange rates for future money transfers
If your business trades internationally then it is likely you’ll need to transfer money from your UK bank account to another account overseas.
This will typically incur various charges, but you can usually get more competitive deals by using a foreign exchange specialist instead of your regular bank or building society.
Money transfers are charged at different rates of interest and you’ll usually have to pay a currency exchange fee if you’re switching between currencies. If your business has money transfers involved in its everyday transactions, these costs can easily build.
So whether you’re looking for ways to save money on regular payments, or you face less frequent one-off business money transfers, there are steps you can take to keep the charges to a minimum.
What are the hidden costs of business transfers overseas?
If you’re thinking about transferring money overseas, it’s a good idea to keep an eye on the currency exchange rates. The stronger the pound and the better the exchange rate, the more money will be received at the other end.
Unfortunately, even if the exchange rate is in your favour, you will still face charges, such as:
Exchange rate mark-ups
Many banks set special exchange rates for money transfers that are above the existing rate and effectively work as commission.
Transaction fees
Some companies charge around £10 for every international money transfer you make.
Receiving fees
Some providers charge a receiving fee to the recipient. Fees can also be charged by intermediary banks who help facilitate the transfer.
How to find the best money transfer for business
To get the best money transfer deals for your business, keeping the transfer and commission fees to a minimum will ensure your money goes further. Here are some other useful tips:
Find a decent exchange rate. The higher the commercial exchange rate, the better the returns you receive
Consider transferring money in larger quantities instead of small, regular instalments. You’ll usually get more competitive deals when transferring a larger balance
Compare deals by working out how much money you’ll get after all the fees and charges are paid
How can I transfer business money overseas?
You can transfer money internationally in several ways, including:
International money transfer firms
International money transfer firms specialise in offering competitive rates to transfer money overseas while providing one of the safer options of doing so.
They usually handle large transfers, perhaps over £3,000, so are typically used for business money transfers. Their fees tend to be minimal and they offer more competitive exchange rates.
High street transfer services
High street transfer services are an alternative way of quickly transferring business money overseas. The charges they levy on small or personal money transfers can be quite high.
Bank transfers
Bank transfers can be arranged with a visit to your branch or through online and mobile banking. It’s one of the most convenient ways to transfer money overseas as you won’t need to register.
You’ll also be able to set up a transfer as a regular payment while being covered by the Financial Conduct Authority (FCA). You pay for the convenience, however, as the fees tend to be high and exchange rates less competitive.
Is it cheaper to use a business money transfer or a bank?
It’s typically cheaper to use business money transfer over a bank. During a bank transfer, the exchange rates tend to be poor value, and the add-on charges (transfer, administration and commission fees) are usually quite high.
It’s worth keeping track of the most up-to-date currency exchange rate to make sure you know when you’ll get more value for your money.
How long does a business money transfer take?
Foreign exchange brokers are the fastest way to transfer money overseas and ensure your money arrives the same day or the following day, while high street transfer services usually take a couple of days to arrive.
Bank transfers can take four to six working days and tend to be the slower alternative. You may be able to pay extra for faster service, but the charge will vary depending on the provider.
It also depends which country you are sending the money to, with funds heading to more remote locations often taking longer.
Can I agree on an exchange rate now and send money later?
A forward contract lets you lock in today’s exchange rate but allows you to transfer money at a chosen date in the future. This can often be any time up to 12 months in the future.
It’s important to note that currencies can be volatile and there is the risk that the rate could move against you.
Many companies offer rate-alert services and the opportunity to set the exchange rate (within a few decimal points of the current rate) for a transfer to be made.
Are business money transfers FCA regulated?
All UK-based firms handling overseas money transfers are authorised by the Financial Conduct Authority, which means there are a number of safeguards in place to protect your transactions.
It might be a good idea to visit the official Financial Services Compensation Scheme website to see whether the provider you’re considering is listed.
How does a business money transfer work?
1. Choose your transfer method
You’ll first need to choose your transfer method first:
Bank transfer: Convenient but often costly with poor exchange rates
Specialist service: Offers better rates and lower fees but requires registration
2. Register with a specialist provider (if applicable)
Sign up online, verifying your business details and identity. You may need to provide documents such as your company registration and proof of address.
3. Gather transfer details
You’ll need a number of details to continue the process, including:
Recipient’s name and address
Their International Bank Account Number (IBAN) and SWIFT/BIC code
Currency and amount to be transferred
Compare exchange rates and fees
Check the commercial exchange rate and factor in transfer and receiving fees. To find the cheapest transfer option, use a comparison service such as MoneySuperMarket to see how much the recipient will get for the amount you’re looking to send.
4. Compare exchange rates and fees
Check the commercial exchange rate and factor in transfer and receiving fees. To find the cheapest transfer option, use a comparison service such as MoneySuperMarket to see how much the recipient will get for the amount you’re looking to send.
5. Start the transfer
If using a bank, log in to online banking and enter recipient details. If using a specialist service, fund your account first, then transfer.
6. Confirm and track the payment
Once you have a confirmation receipt, you should be able to track the transfer to ensure it arrives within the given timeframe.
What should I consider before making a business money transfer?
When choosing a provider to transfer money, it’s best to consider the following:
How much you’re sending, how often, and how quickly you need the money to be transferred
Most currency specialists will only arrange transfers of at least £250, while transfers of under £5,000 may attract higher fees
Many companies will also only accept bank transfers rather than debit card payments
If you regularly transfer money overseas, it may be worth talking to your high street bank which can offer you individualised deals to accommodate your business transfers
How should I compare money transfer services?
To make sure your deal fits your needs, MoneySuperMarket has teamed up with FXcompared to help you compare the most competitive money transfer quotes.
Simply tell us which countries you’re trading with and your annual cross-border payment, and you’ll be able to find a tailored list of options. We’ll specify whether the providers are FCA-regulated and you’ll be able to request a free quote.
How MoneySuperMarket and FXcompared work
We want you to have as much choice as possible when you’re looking to transfer money abroad for business purposes. We’ve ranked these companies according to how much money you would receive, based on a hypothetical quote.
Note that some companies don’t want to be included on comparison websites, so we can’t promise to show you every single one. You can find out more about how we work here.
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Tim Heming
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Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
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