Why Moving Money Abroad Can Be Expensive
If you’ve ever sent money overseas – whether to family, to buy something big, or to fund life in another country – you’ve probably noticed one thing: the banks don’t make it cheap. Slow transfers, hidden fees, and exchange rates can quietly chip away at your total, meaning the person on the other end receives far less than you expected.
The good news? This is a competitive business. And with a little bit of effort, you can make sure more of your money arrives where it’s meant to with minimal fees. Continue to read and we will explain how to do just that!
The Foreign Exchange Market Explained
The foreign exchange market is the biggest market in the world; in 2022 it was recorded that $7.5 trillion worth of currency is traded in one singular day. Even a tiny difference in the exchange rate can have a big effect on the amount of money in a person’s pocket. For example, on a £5,000 transfer, the difference between a “bank rate” and a competitive “mid-market rate” can mean a few hundred pounds more (or less) after money has been transfer. This is why it is important to know your stuff and make sure that you are being savvy with your money.
What Actually Happens When You Transfer Money Abroad
Moving money abroad seems like it should be a simple task, until we are dealt a number of additional fees.
This raises questions like –
- How much will the recipient actually receive?
- Who is taking the fees?
- What are the fees?
- Why is it expensive?
Different banks have relationships with one another. On a global level, banks are interdependent, but this does not mean that every bank is connected to every bank. Through a casual chain of events, multiple banks (what we call correspondent banks) will move money between accounts and currency until the desired transaction is delivered.
Thing is, these correspondent banks charge a fee on top of the exchange rate. On top of this the system is slow, with different time zones and national holidays, it can take some time to effectively move funds between accounts (even if 90% of money globally is digital). Regulations also ensure that transactions are approved. Money can be flagged if we are sending large funds abroad, which can be a sign of money laundering, other times banks can even block our cards when we are spending on our holidays (I’m sure at times this has made many of use curse the banking world even for trying to keep us safe).
Three Ways to Transfer Money Abroad
1. Simple apps for small transfers (a few hundred pounds).
2. Comparison tools for shopping the market
Sites like MoneyTransferComparison.com let you compare multiple providers in seconds, so you’re not stuck guessing if you could have done better.
3. Currency brokers for bigger or regular transfers
If you’re moving more than about £5,000 a year – maybe for overseas property, business, or supporting family, it’s worth building a relationship with a broker such as Currencies Direct, TorFX, XE, Key Currency or Moneycorp. They’ll get to know your needs, let you know when the rates are in your favour, and even offer forward contracts to lock in a good rate for the future.
How to Choose the Best Money Transfer Service
What to Look For
- Good rates – close to the “mid-market” rate you see on Google.
- Low, clear fees – no nasty surprises.
- Speed – some can deliver in minutes, others take days.
- Trust & security – regulated and well-reviewed.
- Guidance – especially useful if you want to time your transfers for the best rate.
Doing your own research is always a good idea, especially since data and features of money transfer apps are constantly changing. But if you’re looking for a quick head start, the apps which are the safest, fastest and easiest to use would be Revolut, Wise and Xoom. Start here and look further into their current features in the above list.
Smart Habits for Sending Money Overseas
- Compare before every large transfer – don’t assume last month’s winner is the best today.
- Use helpful websites like MoneyTransferComparison.com, get a couple quotes before you send your money off.
- Time your transfer if you can – exchange rates move every day.
- Avoid sending money via credit card – it often triggers extra charges.
Final Thought
You work hard for your money. Don’t let poor rates and hidden fees eat into it. With the right approach, a mix of smart comparison, the right provider, and maybe a trusted broker for the bigger stuff, you can make sure more of what you send actually arrives.
A few extra minutes of checking is all it takes to move your money with confidence.