How to send money overseas

Friday 3 November 2023, 3 minute read

Sending money overseas can be a hassle, but it’s also a complete essential for anyone living and working in the modern world. Whether you're supporting loved ones in another country, conducting international business, or simply planning an overseas trip, there’s no denying the importance of sending money abroad - or how much of a chore it can be!

But here’s the good news - in this guide, we'll walk you through the payment methods available to you, and share some of our top tips to make sending money abroad a breeze.

Why you might need to send money overseas

Let's start by understanding the main reasons to send money overseas. It's usually for something pretty important, such as:

Family support: You might need to send money to your family living abroad, helping with their day-to-day expenses, education, or healthcare.
Business matters: If you're involved in international business, you'll often need to send money to suppliers, partners, contractors, or employees abroad.
Investments: Perhaps you're dipping your toes into foreign markets, and you'll need to transfer funds to invest in assets like stocks, bonds, or real estate.
Travel and fun: If you're planning a trip abroad, you'll need to figure out how to manage your finances while enjoying your adventures.
Emergencies: Sometimes life throws us a curveball, and you need to send money overseas quickly.

Choosing the right international payment method

First things first, picking the right payment method is crucial when you’re sending money overseas. The method you choose can impact the cost, speed and ease of your transaction. Here are a few of your main options:

Bank transfers: Traditional, safe, and secure, but they can be a bit pricey due to service fees and not-so-great exchange rates. They can also take multiple days to clear.
Money transfer services: Think Western Union or Wise for quick and convenient options. But watch out for higher fees and less competitive rates.
Online banking: Many banks have online platforms for international transfers, usually with lower fees than traditional banks.
Peer-to-Peer (P2P) platforms: PayPal, Venmo, and Skrill can work for sending money to individuals internationally. They're convenient but might charge higher fees for currency conversion.
Account-to-account payments: Using open banking platforms such as Crezco can help you send money abroad securely, quickly and for a fraction of the cost, usually resulting in 2% saved on fees!

Crack the exchange rate

When you’re sending money abroad, one of the first things you’ll need to factor in is the exchange rate.

Exchange rates can be a bit confusing, so let's break down the different types:

Interbank rates: These are the rates at which banks exchange currencies with each other, representing the best rates you can get.
Retail rates: These include a margin provider’s add to cover their costs and make a profit, usually called a spread. This is where you see some of the biggest differences between providers.
Fixed or floating rates: Some providers offer fixed rates, while others choose fluctuating rates based on market conditions. Knowing this helps with budgeting.

Watch out for sneaky hidden fees

Sending money overseas comes with many fees - and these can seriously add up if you’re not careful. Be aware of these extra charges:

Transfer fees: Many providers charge a fee for the actual transfer. These can vary significantly, so be sure to shop around.
Currency conversion fees: When converting your money into a different currency, you might face flat fees or a percentage of the transaction amount.
Bank charges: Traditional banks may add extra charges, especially when intermediary banks are involved.
Receiving fees: Sometimes, the recipient might be charged fees for receiving the funds. Don't forget to consider these as well.

Get your documents ready

To stay on the right side of international regulations and keep fraud at bay, you might need to provide some documents and go through a verification process. Here’s what you’ll need to have to hand:

Personal identification: This is usually a government-issued ID, passport, or driver's licence to prove who you are.
Proof of address: Sometimes, you must show where you live too, by sharing a recent utility bill or bank statement.
Recipient's info: Accurate recipient details, like their full name, contact info, and bank account details (Swift code or bank account number, sort code…) are also essential.
Transaction purpose: For larger transactions, you might need to explain why you're sending the money, giving a reason like ‘family support’ or ‘a business deal’.

Keep it safe

When dealing with personal or business finances, safety should always be your top priority. Here's how to keep your money secure when you’re transferring it overseas:

Trustworthy providers: Stick with established and trustworthy money transfer services, banks, or online platforms to reduce the risk of fraud.
Double-check recipient info: Ensure you've got the recipient's details spot on to ensure your money reaches the right destination.
Two-factor all the way: If you're using online platforms, enable two-factor authentication to beef up your account's security.
Scam alert: Be super cautious about unsolicited messages or calls asking for money transfers. Scammers are out there, so be on your guard.

Keep an eye on your transfer

Once you've sent your money overseas, don't just set it and forget it. Most providers offer tracking tools or notifications to keep you in the loop. This way, you can address any issues that pop up and make sure your money gets where it needs to be.

Timing matters

Timing is everything when it comes to sending money overseas. Exchange rates can change due to market conditions, and how long it takes for the recipient to access the funds varies.

Here are a couple of things to consider to get the timing of your transfer right:

Exchange rate fluctuations: Keep an eye on the exchange rate and consider using tools like limit orders or forward contracts to lock in favourable rates.
Processing time: Different methods and providers have different processing times. Bank transfers can take longer than using money transfer services, so plan ahead.

Let’s talk tax

Sending money overseas might have some tax implications, especially for bigger transactions or international business. We’d recommend speaking with an accountant to understand and fulfil any tax obligations that might come your way.

Final thoughts

There are quite a few things to bear in mind when you’re sending money abroad. But armed with the right knowledge, you can transfer your money smoothly, safely and cost-effectively.

Remember that every situation is unique, so consider your specific needs and circumstances carefully before making your payment. And hey, you've got this! Happy sending!