The ups and downs of transferring money abroad

Needless to say, many things can happen when you or someone you know are abroad. And let’s be honest, most of these situations involve money in some way, shape or form. For instance, your daughter’s wedding preparations in Barcelona may require some urgent financial assistance, or maybe you need to pay your own mortgage while soaking feet in the Indian Ocean. But international money transfers are complicated, aren’t they? Let’s dig into how they work a little bit.

— Alright, how do they work?

Money is sent electronically, and it’s called a “wire transfer”. These transfers are “settled” using a ledger account system between banks.


The U.S. dollar is generally accepted as the dominant trade currency worldwide. This is why many international wires are sent in U.S. dollar payments. If you want your pounds to end up in a pound sterling account overseas, don’t hesitate to inform your bank of this detail. Otherwise, you might have to pay additional fees or lose money to conversion. Alternatively, if you are sending a payment in pounds to be accepted in any other currency, the equivalent can be converted using a current exchange rate.

— What other fancy words should I know?

None, really. Things like currency fluctuation might sound like a fancy kind of problem for exchange traders, but they’re not. Today, the swinging value of pound against other currencies is an issue for everyone.

— Ok, what are my options?

  • You may go to the nearest bank to transfer the money assuming that it’s your best option. However, there’s a good chance it isn’t: most banks offer poor exchange rates and levy a variety of hidden charges.
  • You may also want to use a different kind of service for instant money transfers. Most of them offer high interbank exchange rates (and still lack convenience).
  • Finally, you may want to wait until the end of this article.

— How much do I lose?

For international payments, the costs fall into two simple categories:

  • Fees (transfer or receiving charges);
  • Exchange rates.

The rate you are offered depends upon a number of factors including:

  • The amount of money you are transferring;
  • The time-frames you are working to (i.e. whether you are looking to lock into an exchange rate for up to 12 months);
  • The currencies you are buying and selling and their volatility;
  • The exchange rate levels at the time of purchase.

Private individuals and small-to-medium-sized businesses usually cannot access these rates. They often change by the minute, so to compare providers properly you need to do it one after the other.

— Does it matter when I make the transfer?

Oh, yes. Depending on the amount you’re sending, the timing of a transaction can also be important particularly if you’re sending larger amounts.

In many cases, people don’t pay much attention to what’s happening to the exchange rate and simply leave the transfer to the last minute hoping for a good rate, assuming that there isn’t much they can do. But they can — with good timing. You’ll need to research exactly when the exchange rate for your currency is the most volatile and figure out when it’s safest to convert it.

— So how do I find the best deal?

As always, there are options:

  • Manually compare the rates and make the transfer at the right time. Pros: you don’t need to pay much besides the fees. Cons: you’re probably far from being a specialist in the area and might still get it wrong. Plus, that’s a lot of research for just one transfer.
  • For larger bank-to-bank international money transfers, i.e. £250 and over, it may be reasonable to compare your bank’s exchange rates with those offered by some of the many currency specialists out there. Pros: you entrust your money to a specialist who knows how to get it right. Cons: you have to pay them.
  • Use Dzing. The service lets you exchange money and make transfers across the globe instantly — and (almost always!) with zero fees.