The best way to transfer money from the UK to the US

Tilly Michell3 minutes
Business tips
The best way to transfer money from the UK to the US
In this article

If you’re a UK business that trades with the US, finding an efficient way to transfer money from the UK to the States can save you a chunk of money, help you avoid supply chain delays, and keep your business running smoothly. 

In this article, we’ll compare different ways to send money from the UK to the US, and help you decide which method is right for you. 

Transfer money via a high street bank 

If you choose to send money from the UK to the US via a high street bank, your bank will complete the transfer via the SWIFT network. There are plenty of reasons why you might opt for this type of transfer. Firstly, you’ve probably been with the same bank for years and you trust them. Secondly, wiring money via your bank is easy, and doesn’t require additional research. 

However, there are several drawbacks to international bank transfers which you should be aware of:  

  1. The cost

    SWIFT payments carry a flat fee of £20 - £25 per transfer, but that’s just the tip of the iceberg. On top of this fee, banks charge between 2.6 - 3.5% above the interbank rate for currency exchange. So if you send £100,000 to the US, you could end up forking out £3,525 in transfer and exchange fees. Not ideal.

  2. The wait time

    SWIFT payments take 1-4 working days to clear, which is frustrating if you’re on a deadline. Your supply chain could be disrupted as you wait for supplier payments to clear. And if you have US employees, they won’t take kindly to receiving their wages late.

  3. Lack of transparency

    Banks aren’t always upfront about their fees, and their exchange rates can be confusing. You might not know exactly how much you’re going to be charged or what the exchange rate will be until after you’ve transferred the money. This can lead to confusion over how much money you need to send, and further delays if it turns out you’ve underpaid.  

Send money via a money transfer service

Money transfer services like Western Union, Xoom and MoneyGram were designed to help people send money abroad without using the banks. In fact, you don’t even need a bank account to receive this type of payment.

Money transfer services are generally faster and marginally cheaper than the banks. For example, Western Union charges 2% above the interbank rate for international transfers.   

Money transfer services are mainly used by individuals sending money to friends a family abroad. They have an upper transfer limit of £50,000 or less, and are not the cheapest option for businesses.   

Send money through a multi-currency account

By far the best option for UK businesses that want to send money to the US quickly, securely and cost-effectively, is to open a multi-currency account.

With an Airwallex multi-currency account, you’ll pay just 0.5% above the interbank rate when exchanging pounds sterling for dollars—that’s 80% cheaper than high street banks and money transfer services. 

Because Airwallex uses a network of local bank accounts to transfer money, rather than the SWIFT network, we’re able to get your money where it needs to go in one business day or less. So you won’t be waiting around for payments to clear. 

But perhaps the greatest benefit of owning a multi-currency account is that you can collect different currencies into your account without exchanging them. In practice, this means you can receive payment from your American customers in dollars, hold those dollars in your account, then transfer them to your US suppliers/employees when the time comes. This type of money transfer is fast and, best of all, free!

Which option is right for you?

If you’re a UK business that regularly trades with the US, opening a multi-currency account is by far the cheapest and fastest way to send money across the pond.  

By cutting the cost of currency conversion and eliminating transfer fees, you can improve your profit margins and set your business on the course for success. 

To learn more about how Airwallex can help your business expand across borders, sign up for a free account, or click below to watch a 3-minute demo video.

Related article: How to switch your business bank account in the UK

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Tilly Michell
Content Marketing Manager

Tilly manages the content strategy for Airwallex. She specialises in content that supports businesses in their growth trajectory.

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