How do international money transfers work?
Key takeaways
International money transfers require converting currency, and transfer speed varies depending on the provider and method used
Fees and charges include transfer fees, exchange rate mark-ups, and intermediary bank costs
Comparing online providers helps find the best exchange rates and lowest fees
Different transfer methods, like SWIFT, SEPA, or specialist money transfer services, impact costs, speed, and convenience
When you send or spend money overseas, you need to convert it into the local currency. This can cost you through transfer fees, a less favourable exchange rate, or both.
Banks and money transfer providers set their own exchange rates, which may include a mark-up on the underlying market rate.
High street banks offer a convenient way to make international transfers, but can have higher fees and less competitive rates.
Specialist money transfer providers often offer lower fees and better exchange rates, potentially leaving more of your money to reach its destination.
How does international money transfer work?
An international money transfer works differently depending on which provider you use, but they usually involve the following:
Registering an account with the international money transfer firm
Understanding the fees, exchange rates and any other necessary information you’ll need to agree to
Booking the transaction, giving details of the recipient’s account and paying the agreed amount, typically by electronic transfer from your UK bank account
How much do international money transfers cost?
There can be a number of fees associated with sending money abroad. Try to understand the costs before agreeing to the transfer. Charges may include:
Sending money abroad fees
Transfer fee
Charged by the sending bank or provider for processing the transaction. This may be a fixed fee or a percentage of the amount transferred, with some providers charging no upfront fee. Percentage-based fees may be lower for larger transfers, while fixed fees can make more sense when sending substantial sums. As a guide, transfer fees can range from £0 to around £40, depending on the provider, destination and payment method.
Exchange rate mark-up
The difference between the mid-market exchange rate and the offered by the provider. This is often one of the biggest costs of an international transfer. High-street banks may typically add around 2–4%, while specialist providers can offer considerably lower margins. Some providers reduce their exchange-rate margin for larger transfers, so it's worth comparing the rate you are offered rather than assuming a particular percentage will apply.
Intermediary bank fees
If a payment passes through one or more intermediary banks, additional charges may apply. These vary depending on the banks and payment route, so check whether they are included in your provider's quote or could be deducted from the amount received.
Receiving bank fee
The recipient's bank may charge for receiving an international payment. A fee of £0–£20 is a guide, although some banks charge nothing and the amount can vary depending on the bank, country, currency and type of payment.
How do I transfer money to a foreign bank account?
There are two main ways you can go about transferring money overseas.
International money transfer firms typically offer more competitive rates than banks and can be a good option for larger transfers. Many specialist providers offer services for both personal and business customers, with transfer limits varying between providers
Banks offer a convenient way to send money abroad, particularly if you already have an account with them. Transfers can usually be arranged online, through mobile banking or in a branch, although limits and charges vary. Banks may offer less competitive exchange rates or higher fees than specialist providers, so compare the overall cost before sending the money
Is the transfer secure?
Before sending money overseas, make sure you are using a bank or money transfer provider that is authorised or registered with the Financial Conduct Authority (FCA). This can help ensure you are dealing with a legitimate provider and understand what protections may apply.
How long does it take to receive money from an international money transfer?
International money transfers typically take anywhere from a few minutes to several days.
The speed depends on factors like the provider, destination country, payment method, and banking hours.
Specialist transfer services often process payments faster than traditional banks, which may take up to five working days due to intermediary banks and processing times.
What is a SWIFT transfer?
A SWIFT transfer is one of the most popular forms of international money transfer and enables secure information, including financial transactions, to be transferred between banks safely.
It is used by most financial institutions, and it stands for the ‘Society of Worldwide Interbank Financial Telecommunications’:
How does a SWIFT transfer work?
A SWIFT transfer moves money between banks in different countries. Your bank sends instructions to the recipient’s bank, sometimes through one or more intermediary banks. You’ll normally need to provide details such as the recipient’s account number or IBAN and the bank’s SWIFT/BIC code. Because the transfer is international, additional security checks may also be required, and intermediary banks may charge fees.
How long do SWIFT transfers take?
SWIFT transfers usually take up to five business days to process, depending on factors like the banks involved, time zones, and currency conversion.
Delays can occur due to intermediary banks, compliance checks, and banking hours. Some banks offer faster SWIFT transfers, but these may come with higher fees.
How much do SWIFT transfers cost?
SWIFT transfer costs vary depending on the banks involved, but typically include:
Sending bank fees.Some banks charge a fixed fee for sending a SWIFT payment, which can be around £15–£50
Intermediary bank fees. Additional charges may apply if the payment passes through one or more intermediary banks. Check whether these are included in the quoted cost or could be deducted from the amount received
Receiving bank fees. Some banks charge to process incoming SWIFT payments
Specialist money transfer providers often offer cheaper alternatives.
Do all international money transfers use SWIFT?
No. While SWIFT is a widely used network for bank-to-bank transfers, other systems exist, including:
SEPA (Single Euro Payments Area). Used for euro transfers between participating European countries. Often faster and cheaper than SWIFT
Local Payment Networks. Some countries have domestic payment systems that can be used to move money into a local bank account without using SWIFT. These can sometimes be faster and cheaper
Money Transfer Operators (MTOs): Specialist services that help you send money internationally, such as Western Union, MoneyGram, and Wise. They may use a combination of payment networks, including local banking systems and SWIFT, depending on the currencies and countries involved
What is a SEPA transfer?
SEPA stands for the ‘Single Euro Payments Area’, and is part of a system designed to make transferring money between the participating countries as simple as domestic transactions.
The SEPA area includes both EU and non-EU countries. This means that while SEPA payment schemes are specifically for euro payments, you don't have to be sending money between two countries that use the euro as their primary currency.
Benefits include:
SEPA instant credit transfers can make funds available to the recipient within seconds
SEPA rules are designed to limit the amount banks can charge for transfers
SEPA uses common payment standards, making euro transfers between participating countries more straightforward
Can the recipient collect an international money transfer in cash?
Some money transfer services allow the recipient to collect cash from an agent location rather than receiving the money directly into their bank account. This can be useful when the recipient doesn't have a bank account, although fees and exchange-rate mark-ups can be higher.
What details do I need for an international bank transfer?
For an international bank transfer, you typically need the following details:
Recipient’s full name (as registered with their bank)
Recipient’s bank name and address
Recipient’s account number or IBAN (International Bank Account Number)
Bank’s SWIFT/BIC (Business Identifier Code)
Currency and transfer amount
Where can I find the IBAN and SWIFT/BIC?
The recipient can find their IBAN and SWIFT/BIC on their bank statements, online banking portal, or banking app. Most banks also list their SWIFT/BIC codes on their website. If unsure, the recipient can contact their bank’s customer service for confirmation.
Personal Finance Expert
Our expert says...
“All the different and often seemingly hidden fees and charges for foreign exchange can undermine confidence in the process. But when you send money overseas, as well as the transaction being secure, the main comparison you need to make is how much of your chosen currency will you get for your pound. Understand this and you can always pick the most cost-efficient deal.”
Other useful guides
Compare brokers with MoneySuperMarket and FXcompared.com
The cost of international money transfers varies from broker to broker.
MoneySuperMarket has partnered with FXcompared.comto show you competitive money transfer deals from a range of registered currency brokers who can help move money to and from more than 125 countries throughout the world.
You can see exchange rates, fees and speed of transfer before deciding which transfer provider you want to use. You can lock in a rate online or over the phone for up to 12 months and pay by debit card or bank transfer into the account you’ve created. Funds will then be transferred safely and securely.
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...
Reviewer
Alan Cairns
Senior Content Editor
Alan breaks down money, home, and energy topics into plain English to help you save money. Ask him about pound cost averaging or Balkonkraftwerk.
