Find the best way to make an international payment

  • What is the cost to me of sending money abroad?
  • 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.
  • 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.
  • 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 25 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.
  • 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.
  • 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.
  • 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.
  • 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.
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  • What is the cost to the other person/business receiving the money?
  • If the person/business is receiving cash in their own currency there are no costs to accept it.
  • 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.
  • The recipient’s bank may charge them for accepting a foreign payment so they will need to check this with their own bank.
  • Businesses who accept card payments pay a charge for this service.
  • Businesses who accept card payments pay a charge for this service.
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  • 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.
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  • How long does it take for the money to arrive?
  • 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.
  • 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.
  • If you are transferring money abroad, your bank can explain how long it will take. After 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.
  • 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.
  • 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. prepaid 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.
  • Providers normally offer a range of options from same day to several days. After 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.
  • The money is transferred instantly.
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  • What security do I get when sending money abroad?
  • 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.
  • 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.
  • It is vital that you use the correct Bank Identification Code and International Bank Account Number (BIC and IBAN – the recipient you’re sending money to will need to provide these). Additional details may be required for payments outside the European Economic Area. 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.
  • 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 are generally a safe way of making payments overseas and do offer some level of fraud protection.
  • Before using any provider you should check what security and protection they provide.
  • 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.
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  • What type of security does the person/business receiving the money get?
  • Businesses may not want to accept cash unless they know and trust you.
  • 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 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.
  • 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.
  • 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.
  • Before using any provider you should check what security and protection they provide.
  • PayPal offers a Seller Protection policy that protects sellers against fraudulent buyers. Personal payments (between individuals) are not covered by this.
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  • How much money can I transfer using this method?
  • 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.
  • There are no value limits for sending foreign currency drafts or cheques from the UK overseas.
  • 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.
  • 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).
  • Most prepaid 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.
  • There are no regulatory limits for sending cash from the UK overseas – though individual providers may set their own limits.
  • PayPal may impose sending limits on individual accounts. Any spending limit can be viewed by the account holder when logging in.
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  • What details do I need to make a payment using this method?
  • You will need to know how much you are sending and know the recipient’s address.
  • You need to know who you are sending the draft or cheque to and ensure that you’re doing it in the right currency.
  • 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 Payments Council’s 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.
  • 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.
  • 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.
  • 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.
  • 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.
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  • What exchange rate/commission applies?
  • 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.
  • If you are sending a foreign currency draft or cheque, your own bank will charge you upfront to cover the cost for the service.
  • 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.
  • 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.
  • You will know the exchange rate up front, as it’s set when you are buying the currency to load on to the card.
  • The exchange rate depends on the provider, so it’s a good idea to check before choosing one.
  • 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.
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  • What countries can I send money to using this method?
  • Many countries prohibit sending cash via post. Contact the Royal Mail on 08457 740740 for full details.
  • Cheques and drafts are not used or accepted in every country worldwide so you are strongly advised to consider other alternatives.
  • In principle anywhere you want but not all banks can make payments to smaller countries. Also government sanctions against certain countries may prevent a payment being sent.
  • UK-issued cards will be branded Visa, MasterCard or American Express – these are all widely accepted globally wherever their logo appears.
  • prepaid carrying the Visa or MasterCard logos are widely accepted globally wherever their logo appears.
  • Again this will vary between providers but the range of countries is usually quite large.
  • PayPal operates a network of more than 190 countries and regions. A list of services available in each country can be accessed here: https://www.paypal.com/worldwide/
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  • Is there anything else that I need to know?
  • 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.
  • 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.
  • European regulations require that customers making payments within the EU get full information about costs and the time taken.
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  • 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.
  • Details of different providers and their rates and charges can be found on comparison sites.
  • PayPal customers should be aware of items excluded from the Buyer and Seller Protection policies: https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/UserAgreement_full#11.
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