Introduction

Every day thousands of people transfer money abroad for a variety of reasons. These could include buying property, buying items over the internet, sending money to friends or family or paying for holiday accommodation.

There are a variety of methods for making payments abroad, from using cash to making an electronic transfer between bank accounts. There are also some more specialist services such as online currency brokers. In this guide we will focus on the main methods available, how much they cost, timescales and how safe your money is.

 

Basic security advice

  • Although easy, sending cash abroad in the post is generally not a good idea and is actually prohibited in some countries. Although you can buy insurance and pay for guaranteed delivery, it’s not a safe way of transferring money overseas.
  • If you send money abroad by using a third party other than your bank, you should check the company is either authorised or registered with the Financial Conduct Authority as a “payment institution”. This will affect how safe your money is while it’s being transferred.
  • Reputable companies will supply you with details of charges up front, for example, the exchange rate and how long the payment will take to reach the recipient. They should also tell you how to get incorrect transactions corrected, the level of protection your money gets and your rights to cancel or terminate the transaction.
  • If you’re using your bank account to make a transfer to an overseas bank account, it’s very important to get any bank details correct. These include the recipient’s bank account number and sort code. As well as the basic sort code and account number that we use in the UK, there are additional details needed when transferring money overseas, known as the International Bank Account Number (IBAN) – the recipient you’re sending money to will know this and be able to provide it to you in advance. It’s always worth double checking the data once you’ve entered it – if the money is transferred to the wrong account it could be very difficult to get it back.
  • Finally, although various ways of transferring money abroad may be safe, it’s a good idea to be sure the recipient is legitimate. For example, if you’re paying for holiday accommodation, make sure you arrange it through an established travel agent rather than an online advert – otherwise you might arrive to find your accommodation doesn’t exist. The same goes for overseas retailers; make sure they are legitimate and legal, so that they will keep your payment details safe and secure.

 

Exchange rate fluctuations

  • When you make a payment abroad the amount of money the overseas recipient will receive will depend on exchange rates as well as the fees charged.
  • Foreign exchange rates can vary considerably due to demand for the currency, as well as wider economic conditions. When you make an overseas payment the organisation you use should be able to tell you the exchange rate it will use and whether it’s fixed at that point in time or whether it could be subject to future currency fluctuations.
  • This could vary from bank to bank and other organisations. Many banks show current exchange rates on their websites and will give you an indicative rate ahead of making the payment. The exact rate used will be shown to you after the transaction, probably on your statement.

 

Ways to make international payments

Cash

  • Although simple, sending cash overseas isn’t recommended. Some countries prohibit sending cash in the post and these are listed on the Royal Mail website. Secondly, there are no security measures in place and as well as the recipient not being able to be 100% sure the cash is not counterfeit, it can also be lost or stolen. However, senders can insure cash before sending or pay for a guaranteed delivery with signature on receipt.

 

Foreign currency cheques and drafts

  • These types of payments are provided by banks, for a charge. If you want to send a foreign currency cheque you’ll probably need a foreign currency account so isn’t really practical for one-off payments. Alternatively if you send a foreign currency draft there will be a charge from your bank and the recipient may also be charged for paying in a draft or cheque sent from the UK.
  • Foreign currency cheques and drafts aren’t very secure as they could get lost or stolen on the way and they take longer to clear than normal cheques once they have arrived. There are usually better options for sending money abroad.

 

Electronic transfer

  • These are payments made directly from your bank account to another individual or business account abroad. There are different rules and charges for electronic transfers depending on whether you are sending money inside the European Economic Area (EEA) or not. Quicker transfers usually cost more and if you are sending money outside the EEA, you should expect to pay £20 or more per transfer.
  • Electronic transfers are a secure option but you will only be able to do it with a bank if you hold an account with them. You must also make sure you get the details of the person receiving the money right. These could include the Business Identifier Code (BIC) and International Bank Account Number (IBAN) as well as the recipient’s name. Some banks will also need the recipient’s bank address and home address. If the money is sent to the wrong account it may be hard to recover.
  • Speak to your bank or building society to find out the exact amount you will be charged for using this service. If it’s something you do a lot, it might be worth shopping around different providers for the best deal.

 

Credit and debit cards

  • If you’re paying an overseas business, hotel or retailer you can use a credit or debit card.
  • Funds will be reserved on your account as soon as the payment is authorised although it can take a few days for the money to leave your account and show on your statement.
  • You’ll probably need your PIN if you pay for goods in person although some countries don’t use chip and PIN and will require your signature instead. If you’re making a payment online you’ll need to provide the three-digit security number on the back of your card, when prompted.
  • Credit card purchases benefit from additional protection under Section 75 of the Consumer Credit Act if anything goes wrong.

 

Prepaid cards

  • Prepaid cards can be purchased and loaded with several different currencies. If you wanted to pay someone abroad you could load up an anonymous prepaid card and send it to them. To prevent money laundering, prepaid cards have restrictions on the amount you can load onto them or spend per year and you will have to prove your identity when applying for a card. Check with your card company if you need more details on exactly how the regulations apply to you.
  • If your card is lost or stolen you should contact the provider to cancel the card – most prepaid card providers will also transfer any funds you had on the card to a new one. You need to take the same precautions that you would with debit and credit cards – never tell anyone your PIN.

 

Wire transfers

  • Wire transfers are provided by companies such as American Express, Western Union and MoneyGram and are sometimes called international money remittances. Costs vary, depending on how much you want to transfer, where you are sending it and how quickly you need it to arrive (they can be processed on the same day). The wire transfer company may require both the sender and receiver to provide certain details or documentation to verify their identity. Wire transfers are sometimes used by criminals so only send money to someone you know this way and don’t tell anyone your receipt or transaction number.

 

General internet banking advice

  • If you use internet banking and are making a payment to a bank account abroad, it may be possible to do this online. Your bank could ask for certain information such as the recipient’s account name, the Business Identifier Code (BIC) and International Bank Account Number (IBAN). Some banks will also need the recipient’s bank address and home address.
  • It’s really important to make sure you get the details right; it may be difficult to get the money back if it ends up in the wrong account.
  • Never tell anyone else your online banking passwords. If you’re sending money to someone else they won’t need these details to receive it. Whether you’re home or abroad it’s important to keep your PIN and passwords safe – avoid writing them down if possible.
  • If you receive an email purporting to be from your bank and asking you to verify your details to stop your account being closed, treat it with suspicion. These “phishing” emails aim to persuade bank customers to enter their log-in details on to a fraudulent site with a view to capturing enough confidential details to be able to steal money. It’s best to report any suspicious emails to your bank’s fraud department and remember that your bank will never ask for your log-in details, PIN or password in an email.
  • For more security tips, go to www.financialfraudaction.org.uk

 

Commonly asked questions

  • CASH
    If you are sending cash in the currency of the person who’s to receive it, there will be the normal conversion costs of purchasing foreign currency with sterling. Some companies may also charge a commission. You’ll also have to pay for postage or for a courier.
     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    Banks will each charge varying amounts for issuing a foreign currency draft. A draft can be issued in sterling or any other currency at your request. Sterling cheques (ie out of your normal cheque book) should NEVER be sent abroad as they would always need to be sent back to the UK for processing. Consequently you would find it expensive, slow and if anything goes wrong you may be liable.
     

  • ELECTRONIC TRANSFER
    Bank charges for making an electronic payment vary – it’s up to each individual bank to set a price they think is competitive. However, if you are sending money within the European Economic Area (the 28 member states of the EU and Iceland, Norway, Liechtenstein) the recipient will receive the exact amount you send, in the same currency you send it in. For example if you send 100 euros this is the amount the recipient must receive. No charges can be taken from the amount you send, so you will be told about any charges made by your bank upfront which will include the cost of the foreign currency exchange. If you are making payments to other countries outside the EEA, the rules may be different.
     

  • DEBIT AND CREDIT CARDS
    If you are paying a business overseas, a hotel or shopping online, one of the easiest and most widely accepted ways is to use a debit or credit card. Foreign currency exchange fees will be applied to purchases. In addition some debit card providers will charge a transaction fee – this information is always provided in your current account provider’s terms and conditions.
     

  • PREPAID CARD
    Some prepaid can be bought and loaded with several different currencies. This card can then be sent abroad for use. Charges may apply to buy the card, load it with currency and to re-load it. Some cards may also have fees per transaction. You should check the terms and conditions of the individual card.
     

  • NON-BANK WIRE TRANSFERS/INTERNATIONAL MONEY REMITTANCES
    These services aren’t connected to a bank account. There are a number of non-bank companies providing this service, each with different charging structures. Charges often vary depending on the amount of money you want to send, how quickly you want it to arrive, the currency you want to send it in and the foreign exchange rate provided.
     

  • PAYPAL
    For personal payments, if the transaction requires a currency conversion, PayPal will use a retail exchange rate which is the wholesale cost of foreign currency (determined by an outside financial institution) in addition to a currency conversion fee. This fee depends on the currency you are converting into and can be viewed under the Currency Conversion Fee section of the User Agreement. If the payment is being funded by a debit or credit card, there is an additional charge of 3.4% of the transaction value, and a further 20p on top – this can be paid by either the sender or the recipient.

  • CASH
    If the person/business is receiving cash in their own currency there are no costs to accept it.
     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    It will depend on the recipient’s bank. They may charge the recipient for paying in either a foreign currency draft or sterling cheque sent from the UK.
     

  • ELECTRONIC TRANSFER
    The recipient’s bank may charge them for accepting a foreign payment so they will need to check this with their own bank.
     

  • DEBIT AND CREDIT CARDS
    Businesses who accept card payments pay a charge for this service.
     

  • PREPAID CARD
    Businesses who accept card payments pay a charge for this service.
     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    None
     

  • PAYPAL
    For personal payments, if the transaction requires a currency conversion, PayPal will use a retail exchange rate which is the wholesale cost of foreign currency (determined by an outside financial institution) in addition to a currency conversion fee. This fee depends on the currency you are converting into and can be viewed under the Currency Conversion Fee section of the User Agreement. If the payment is being funded by a debit or credit card, there is an additional charge of 3.4% of the transaction value, with a further 20p on top – this can be paid by either the sender or the recipient. Businesses pay an additional fee for receiving payments.

  • CASH
    As long as it takes for the postal service to deliver it. You can also opt to use a 24 hour courier service which will get it there faster but cost substantially more

     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    Always check timings with your bank. This will firstly depend on how the foreign currency draft or cheque is sent to the recipient. Once they receive it and pay it in, it will then depend on the country’s domestic clearing arrangements for cheques and drafts. A draft will be cleared abroad and this may take only a few days. A cheque from your cheque book would need to be sent back to the UK to be cleared and this can take several weeks. An electronic payment is always likely to be faster and more secure.

     

  • ELECTRONIC TRANSFER
    If you are transferring money abroad, your bank can explain how long it will take. Since 1 January 2012 if you are sending money in euros or sterling within the European Economic Area it must reach the recipient the working day after you have initiated the payment. For other currencies your bank will be able to advise you of the maximum timescale whether you’re sending foreign currency or sterling.

     

  • DEBIT AND CREDIT CARDS
    Your payment is authorised (or declined) and funds reserved on your account instantaneously. However, it can take a few days before the payment is debited from your account, and that process only starts when the retailer submits its card payments for processing. If you have paid by credit card or debit card it will appear on your next monthly paper or online statement. The length of time it takes for the business abroad to receive funds will depend on the type of card used and the commercial arrangement with their own bank.

     

  • PREPAID CARD
    To send a prepaid card overseas for someone to use will take as long as it takes the postal service to deliver it, unless you opt to use a courier which will get it there quicker but could cost substantially more. The value on the Prepaid card will be debited instantaneously each time the card is used. The length of time it takes for the business abroad to receive funds will depend on the type of card used and the commercial arrangement they have with their own bank.

     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    Providers normally offer a range of options from same day to several days. Since 1 January 2012 payments made within the European Economic Area, in euro or sterling need to reach the recipient the working day after you have initiated the payment. Prices may vary accordingly.

     

  • PAYPAL
    The money is transferred instantly.
  • CASH
    No specific security measures exist. Cash can be mislaid or lost in the post, however, you can insure it. Please be aware that many countries prohibit sending cash through the post. For a full list check the Royal Mail website.
     
  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    You don’t enjoy the same level of fraud protection as you would get with cheque and bankers’ drafts in the UK. If the draft is intercepted and paid into someone else’s account you may lose the money.
     
  • ELECTRONIC TRANSFER
    It is vital that you use the correct International Bank Account Number (IBAN) and where required the Business Identifier Code (BIC) as the recipient you’re sending money to will need you to provide these. If you provide incorrect details and your payment is sent to the wrong account you may not be able to recover your money. To prevent money laundering some organisations may undertake additional identity checks.
     
  • DEBIT AND CREDIT CARDS
    You have the same fraud protection as when using your credit and debit cards in the UK. Also if you use your credit card to pay for something over £100 and under £30,000 you benefit from additional legal protection if anything goes wrong thanks to Section 75 of the Consumer Credit Act.
     
  • PREPAID CARD
    Prepaid are generally a safe way of making payments overseas and do offer some level of fraud protection.
     
  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    Before using any provider you should check what security and protection they provide.
     
  • PAYPAL
    PayPal offers a Buyer Protection policy that protects aginst goods not arriving or not arriving as described, but this protection does not cover personal payments (payments between individuals rather than to a business). Personal payments may be subject to chargebacks if the source of the funds (i.e. the bank account or credit card) has been used fraudulently.
  • CASH
    Businesses may not want to accept cash unless they know and trust you.

     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    There are no specific security measures in place. A recipient may be reluctant to accept a cheque as they can be stolen en route, or get cancelled before they are paid in.

     

  • ELECTRONIC TRANSFER
    Electronic payments are irrevocable so the business or person you are paying can be confident of getting the money. Some organisations might perform additional identity checks to prevent money laundering.

     

  • DEBIT AND CREDIT CARDS
    Providing the business carries out appropriate checks to minimise the chance of somebody using a card that does not belong to them, then they should be confident of getting the money.

     

  • PREPAID CARD
    Providing there is enough money loaded on the card and that the correct PIN/ genuine signature is used, the business can be confident they will get the money.

     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    Before using any provider you should check what security and protection they provide.

     

  • PAYPAL
    PayPal offers a Seller Protection policy that protects sellers against fraudulent buyers. Personal payments (between individuals) are not covered by this.
  • CASH
    The Royal Mail advises that it’s better to send a postal order, but if you are going to send cash you are limited to sending £100 from the UK overseas. In addition the Royal Mail doesn’t allow coins to be sent through the post and you will need to follow packaging guidelines for notes.

     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    There are no value limits for sending foreign currency drafts or cheques from the UK overseas.

     

  • ELECTRONIC TRANSFER
    There are no regulatory limits for sending money from the UK overseas. However, some banks may set a value threshold on what they allow their customers to send. Additionally if payments are above a specific value your bank may charge you a percentage of the amount of the money being sent.

     

  • DEBIT AND CREDIT CARDS
    There are no regulatory limits for making card payments from the UK overseas, but your card issuer may set limits on what you can spend (particularly in the case of credit cards).

     

  • PREPAID CARD
    Most prepaids limit how much can be loaded at any one time – typically this is between £3,000 and £5,000. There may also be a cap on how much can be spent on the card in one year which you should check with the card provider.

     

  • PAYPAL
    PayPal may impose sending limits on individual accounts. Any spending limit can be viewed by the account holder when logging in.
  • CASH
    You will need to know how much you are sending and know the recipient’s address.

     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    You need to know who you are sending the draft or cheque to and ensure that you’re doing it in the right currency.

     

  • ELECTRONIC TRANSFER
    Within the European Economic Area (EEA) you need the recipient’s correct BIC and IBAN (made up of the destination country code, bank code, customer’s sort code and account number equivalent). You can use the IBAN checker. Outside the EEA, BICs are usually used but not IBANs. Other information, such as the address of the bank and/ or the person receiving the money may also be required. Check with your bank in advance of making the payment if you’re not sure.

     

  • DEBIT AND CREDIT CARDS
    If making a card payment online or by phone you will need to give the same information you provide making these transactions at home, i.e your billing address and card details. If paying for goods in person abroad – you’ll need to input your PIN (or signature, if they haven’t upgraded to chip and PIN). If you are abroad in person, it’s generally cheaper to use your credit card for purchases and your debit card to make ATM withdrawals, but check your terms and conditions.

     

  • PREPAID CARD
    If withdrawing cash or shopping, the prepaid cardholder will need to use the PIN that has been issued for the card. You should NEVER send a card and a PIN in the same package – this would allow the card to be used straight away if it was stolen.

     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    You may be required to provide certain details or documentation to verify your identity. The person receiving the money will need to verify their identity as well. The exact information required varies between providers – it’s a good idea to check before you make a payment.

     

  • PAYPAL
    To make a personal payment you need either the email address or the mobile phone number of the person you are sending money to. To pay a business abroad you can just log into your PayPal account from the company’s website to make a payment.
  • CASH
    You can exchange money at your bank, post office and a number of other foreign currency brokers.You should shop around to get the best deal. Some providers advertise competitive exchange rates and then a flat fee for the service whilst others have a 0% fee and a less competitive exchange rate.

     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    If you are sending a foreign currency draft or cheque, your own bank will charge you upfront to cover the cost for the service.

     

  • ELECTRONIC TRANSFER
    Your bank must tell you about any charges and either the exchange rate to be used or how it is calculated. This may be covered in the terms and conditions or the information your bank should provide when you make the transaction. Banks publish exchange rates on their websites and will give you an indicative rate ahead of making the payment. The exact rate used will be shown to you after the transaction, probably on your statement.

     

  • DEBIT AND CREDIT CARDS
    Most card companies or banks either use their own daily exchange rate or one provided by the card schemes – Visa, MasterCard or American Express. You can contact your card company to check this in advance or it will appear separately on your monthly bill or statement after the transaction.

     

  • PREPAID CARD
    You will know the exchange rate up front, as it’s set when you are buying the currency to load on to the card.

     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    The exchange rate depends on the provider, so it’s a good idea to check before choosing one.

     

  • PAYPAL
    The exchange rate is set by the financial institution funding the payment (e.g. bank or credit card company) and is adjusted according to market conditions.
  • CASH
    Many countries prohibit sending cash via post. Contact the Royal Mail on 08457 740740 for full details.

     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    Cheques and drafts are not used or accepted in every country worldwide so you are strongly advised to consider other alternatives.

     

  • DEBIT AND CREDIT CARDS
    UK-issued cards will be branded Visa, MasterCard or American Express – these are all widely accepted globally wherever their logo appears.

     

  • PREPAID CARD
    Prepaids carrying the Visa or MasterCard logos are widely accepted globally wherever their logo appears.

     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    Again this will vary between providers but the range of countries is usually quite large.

     

  • PAYPAL
    PayPal is available in 203 markets and 26 currencies. A list of services available in each country can be accessed here: https://www.paypal.com/worldwide/
  • CASH
    If you are posting a large amount of cash you may want to take out insurance. If you are buying foreign currency with a debit card some card companies will charge you a flat fee. You will always pay if you use a credit card. Check your terms and conditions. Some countries impose a cash value limit on transactions, e.g. in Italy there is an upper limit of €5000 for any transaction, and Greece does not allow person-to-person or business-to-business cash transactions over €1500.
     

  • FOREIGN CURRENCY DRAFTS OR CHEQUES
    Not all banks issue foreign currency drafts. You should avoid sending foreign currency cheques abroad for a number of reasons – it is expensive, takes a long time to process and you don’t have the same protection overseas if anything goes wrong or the cheque goes astray. If you decide to use this method, under no circumstances should you alter one of your own cheques by changing the pound symbol to another currency and sending it off. Although the cheque may be accepted by the recipient’s bank you could be landed with large and unexpected charges and it would always need to be returned to the UK for processing.
     

  • ELECTRONIC TRANSFER
    European regulations require that customers making payments within the EU get full information about costs and the time taken.
     

  • PREPAID CARD
    As you are preloading the card with a specific amount i.e. dollars or euros, you are effectively betting on the exchange rate staying relatively stable. If the exchange rate changes you may gain or lose out.
     

  • NON-BANK WIRE TRANSFERS / INTERNATIONAL MONEY REMITTANCES
    Details of different providers and their rates and charges can be found on comparison sites.
     

  • PAYPAL
    PayPal customers should be aware of items excluded from the Buyer and Seller Protection policies: https://www.paypal.com/us/webapps/mpp/paypal-safety-and-security.