If you are a UK business that has international suppliers one of the safest ways of making a payment efficiently is via a wire transfer. Wire transfers are a form of money transfer that can be carried out by your bank or via an online foreign exchange broker whereby money is simply transferred from your bank account, converted into the recipient’s home currency and sent directly into their bank account. Sending money abroad through a foreign exchange brokerage is the cheaper option and often the quickest. Although many are quite apprehensive about sending large amounts of money via an unfamiliar brokerage they offer far better exchange rates, cheaper transfer fees and a far quicker service than most leading UK banks. You will find that all legitimate brokerages within the UK are either regulated by the Financial Services Authority or by HM Revenue and Customs. You can request a bank status enquiry (a letter from their bankers) from a foreign exchange broker that will validate their business and offer you further piece of mind.
Banks Vs Foreign Exchange Brokers
Whether you are making a one off payment or regular payments to suppliers overseas you must consider the financial implications of using a supplier abroad instead of in the UK. Foreign exchange rates, commission charges, fees and payment delivery times will all impact your profit. Let’s look at how using a foreign exchange broker instead of a high street bank to make a money transfer will impact your business.
Fees and commission
Most brokers will charge no fee for making an international payment abroad especially if you are looking to make regular payments overseas. Banks generally will charge a fee ranging from £10-£40 for each transaction. Visit the money transfer comparison table to view further information on fees charged by the leading UK foreign exchange brokerages and banks.
Exchange Rates
Foreign currency brokers offer more competitive exchange rates than high street banks. This is due to their bulk buying power in the markets and their willingness to give you better rates if you are a regular loyal customer. Many businesses and individuals use the bank when making international moneys transfers because it is the easiest and they feel safest option. This unfortunately means that these individuals are often left out of pocket. Using your bank should be your last resort for international payments!
Specialist advice – on the right time to buy currency
Making an international payment via your bank is generally completed by a bank employee working in a call centre or branch, they will act upon your instruction and send your money at some point during the day of instruction. A foreign exchange brokerage works in a completely different manner to this. You will have a currency specialist assigned to you who will look at the market and help to advise you on the best time to send you money abroad in order to achieve the best exchange rate. A currency expert can also discuss the option of buying a forward contract to guarantee a good exchange rate at a date up to two years in advance to help mitigate your foreign exchange exposure and risk.
Delivery
Money transfer initiated by a foreign exchange broker to Europe or America and Canada will take 24-48 hours as standard whereby a Bank will charge you an additional fee for making a priority payment within these timescales. If you choose not to pay for this priority service an international money transfer via a bank will typically take 4-5 days. This does vary slightly by country.
Visit the money transfer comparison tables to find out further information on foreign exchange brokerages and how to register to use their services. A useful glossary of money transfer terms can also be found in the Compare Currency blog.
