Traditionally dominated by high street banks, and the likes of Western Union and MoneyGram, the international money transfer market has been booming over the last few years. And with many new FinTech firms jumping in to take a slice of the action, there has never been more firms to choose from.
But with so many options out there, which firms are worth a second look? Well, to help you find out more, here’s the Smart Money People guide to international money transfers.
But first, just why do people need to move money?
In truth, there are many reasons why both consumers and businesses need to transfer money abroad. Here are four of the most common:
Workers sending money home to support their families is a popular reason why consumers need access to money transfer services. Remittances often play a vital role in the economies of many less developed countries like the Philippines and Liberia.
2. Purchase of property overseas
The classic example here is Brits buying a holiday home abroad, be it in sunny Cyprus, or on a French ski slope!
3. Paying for good and services
Most businesses will have to make the odd overseas payments, but for others making overseas money transfers will be a much more common occurrence. One business owner who uses his business bank for money transfers had this to say in a business banking review: “after a few years of growing you’ll notice the high international charges a lot. We had over £400 fee on one payment.” Large businesses often have vastly more complex money transfer and currency exchange that may even require full time management.
4. Getting money to friends / relatives / students abroad
Ever received an urgent email from a friend asking for some money while they were abroad? Perhaps they’ve lost their money, or spent it all on one to many tequilas! Whatever the reason, being able to quickly and securely get money to them can require a money transfer. Students studying abroad are another key group that tend to make use of money transfer services.
Things to look out for
While transferring money abroad is increasingly easy, there are some things worth looking out for:
1. Currency exchange rates
Now this really is the big one. While your bank can help to facilitate a money transfer, they may not be offering you the best rate, in fact they probably aren’t! A bit of time searching around could help to save you thousands!
2. Fees & charges
Found a good rate? Well next up is the small print. What fees and charges will be added to your transfer? Once again, it’s worth comparing.
Some firms are quite happy to transfer small amounts (like £10), while others have minimums of £1,000 or more.
4. Prepaid cards
A number of prepaid cards also offer overseas money transfers. However, without credit checks or local proof-of-address requirements, a number of prepaid customers have reported having their accounts frozen, with little explanation as to why. Transferring large amounts through a prepaid card comes with a guidance note. Take a look at our Pockit prepaid card reviews to read the experiences of others.
The future of money transfers
It’s clear that the cost and overall transparency around international money transfers will continue to lead the discussion over the next few years. And with such a wide range of consumers and businesses using this financial product, it’s not hard to see the costs of sending money overseas to continuing to fall.
So, who’s who in the international money transfer arena?
As part of our British Bank Awards we’re currently looking for the UK’s ‘Best Money Transfer Provider 2018’. We’ll know the results on the 1st March! Our Finalists are Currency UK, MayfairFX, Revolut & WordlFirst. You can have your say by voting here.