Sending money internationally: What you need to know
Global mobility has changed how we live, work, and connect with people worldwide. You could be supporting family overseas, purchasing international property, or conducting business across borders; whatever it is, the need for efficient cross-border payments has never been greater. According to the Migration Data Portal, global remittances continue to grow, reaching $905 billion in 2024, which is to show the sheer volume of money moving internationally each year.
- How international money transfers work
When you send money across borders, several mechanisms work behind the scenes. Traditional bank transfers usually use the SWIFT network, connecting over 11,000 financial institutions globally. However, this system often involves multiple intermediary banks, and each can potentially add fees and processing time. Alternative methods include specialist money transfer operators, digital payment platforms, and fintech solutions that may use different networks to move funds more efficiently. These services often bypass traditional banking routes by using local banking networks in both sending and receiving countries, which can lower costs and improve the speed of transactions.
- Key factors to consider before transferring money
Exchange rates have an impact on the value received by your recipient. The mid-market or interbank rate represents the “true” exchange rate, but most providers add a markup to this rate. This markup varies between providers and can really affect the final amount. Transfer fees constitute another important consideration, with structures varying from flat fees to percentage-based charges. Some services advertise “zero fees” but compensate through less favourable exchange rates.
- Avoiding hidden fees and getting the best exchange rate
To secure the most cost-effective international money transfer experience, compare total costs rather than just advertised fees. Calculate the amount your recipient will actually receive after all charges and exchange rate conversions. Many comparison sites and calculators can help with this process. Timing your transfer can also yield benefits, as currency markets fluctuate constantly. Some providers offer rate alerts or forward contracts that lock in current rates for future transfers, protecting against unfavourable market movements.
- Ensuring secure and reliable transfers
Security should remain important when moving money internationally. According to Financial Fraud Action UK, financial fraud losses across payment cards, remote banking, and cheques totalled over £1.2 billion in recent years. This is to say that you should always verify that your chosen provider maintains appropriate regulatory approvals in the countries where they operate. Look for services employing solid encryption standards and multi-factor authentication to protect your transactions.
When you understand these important aspects of international money movement, you can make better decisions, potentially saving money while making sure your funds reach their destination securely and efficiently.
