What’s the best way for a business to transfer money to and from the UK?
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, including currency exchange fees and mark-ups. While these costs can easily build up, you can usually get more competitive deals by using a foreign exchange specialist instead of your regular bank or building society.
With that in mind, whether you’re looking for ways to save money on regular payments or face less frequent one-off business money transfers, there are steps you can take to keep charges to a minimum.
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 useful tips:
Find a competitive exchange rate. The better the exchange rate you receive, the more foreign currency you’ll get for your money.
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 the recipient will receive after all fees and charges have been deducted.
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 securely transfer money overseas.
They usually handle large transfers, perhaps over £3,000, so are regularly 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 pay for the convenience, however, as the fees tend to be high and exchange rates less competitive.
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 a fixed fee of around £5 to £10 for an international money transfer, although fees vary depending on the provider, destination and payment method.
Receiving fees
Some providers charge a receiving fee to the recipient. Fees can also be charged by intermediary banks who help facilitate the transfer.
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 so you can compare the rate offered by your provider with the wider market rate.
The Bank of England publishes daily exchange rates, which can be used as a reference when comparing rates.
How long does a business money transfer take?
Foreign exchange brokers can often offer faster international transfers, with some payments arriving the same day or the following day. High street banks and transfer services can take a couple of days or longer, depending on the payment and destination.
Bank transfers can take several working days and tend to be the slower alternative. You may be able to pay extra for a faster service, but the charge will vary depending on the provider.
The destination also matters, with transfers to some countries and more remote locations taking longer to arrive.
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. You may have to put down a deposit too.
It’s important to note that currencies can be volatile and there is the risk that the rate could move against you – for example, you could lock in a worse rate than you would have otherwise received.
Many companies also offer rate-alert services, allowing you to set a target exchange rate and receive an alert when the market reaches it. You can then arrange your transfer at that rate, subject to the provider’s terms.
Are business money transfers FCA regulated?
Many UK firms providing international money transfer services are authorised or registered with the Financial Conduct Authority (FCA), which means they must meet certain regulatory requirements and have safeguards in place to protect customer funds.
Before using a provider, check its details on the official FCA Financial Services Register to confirm its regulatory status. It’s also worth checking what protections apply to your money, as FCA regulation does not necessarily mean your funds are covered by the Financial Services Compensation Scheme (FSCS).
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
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 for your business money transfer, consider:
Cost. Compare the exchange rate, transfer fees and any other charges to see how much the recipient will receive
Speed. Check how quickly the money can arrive, particularly if the payment is time-sensitive
Security. Make sure the provider is appropriately regulated and check what safeguards and protections apply to your money
Convenience. Consider how easy it is to arrange transfers, the payment methods available and whether the provider offers features such as regular payments, rate alerts or dedicated support
Transfer limits. Check whether there are minimum or maximum transfer amounts and whether additional checks are required for larger payments
Regular transfers. If you regularly send money overseas, compare providers and ask whether they offer preferential rates or other services for regular business transfers
Other useful guides
Looking for more information on sending money overseas? We have a number of guides to help, including:
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.
Author
Tim Heming
Personal Finance Expert
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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Collette Shackleton
Content Writer
Collette is an experienced Content Writer at MoneySuperMarket, helping people make sense of money and insurance topics without the jargon. She shares her experience as a first-time Mum and top...
