The best way to transfer money to the UK

Margaret Nguyen
4 minutes
The best way to transfer money to the UK
In this article

If your business has vendors, suppliers, or other employees operating out of the UK, finding the best way to transfer funds internationally can put some money back in your wallet. The right method of sending money overseas can also help you avoid supply chain delays and keep your business running smoothly.

In this article, we’ll compare different ways to transfer money to the UK, and pin down which way is the best for you and your business.

Transfer money through the SWIFT network

You might choose to transfer money internationally through a large retail bank. If this is the case, your bank of choice will send the transfer through something called the SWIFT network

SWIFT creates a payment order and sends it through multiple financial institutions’ accounts until it arrives at its final destination. The SWIFT network currently includes over 10,000 financial institutions worldwide, and provides a consistent method for global money transfers.

Plenty of reasons exist for wanting to use this type of transfer. 

For example, you’ve probably been a patron of the same bank for some time and trust them. Wiring money via your bank is simple, and this method doesn’t require a lot of additional research as long as you have the correct information needed for the transfers.

However, you should consider the drawbacks to international bank transfers using the SWIFT network, including cost, wait time, and transparency.

The cost

There are a number of fees you should be aware of when you make a SWIFT payment.

When transferring money between banks, each bank will likely charge a service commission or handling fee. Because of the international nature of the SWIFT network, it’s difficult to track down a set table for fees. However, the bank you use might charge one flat fee to cover them. Clarify costs of sending a SWIFT payment through your bank by speaking with them directly.

You should also research exchange rates if your transfer involves different currencies. Banks don’t always offer the best exchange rates on SWIFT transactions. These rates are sometimes up to 5% higher than the interbank foreign exchange (FX) rate.

The wait time

SWIFT payments can take up to four business days to clear, which can be frustrating if you’re sending money to the UK on a deadline. Your supply chain could be disrupted as you wait for supplier payments to clear, and if you have UK employees working for you, they won’t appreciate a delay in payroll.

Lack of transparency

A lack of transparency is another element to consider if you opt for bank transfers. 

Banks aren’t always upfront about their fees, and exchange rates can be complicated. You may 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, additional costs, and late payments.

Send money through a money transfer service

Money transfer services such as Western Union and MoneyGram were designed to assist people in sending money internationally without depending on a bank. You don’t even need to have a bank account to receive this type of payment.

Money transfers using these services are typically quicker and marginally cheaper than using a bank. These services are mainly used by individuals who are sending money to friends and family abroad, and there is a $50,000 upper transfer limit.

Send money through PayPal or peer-to-peer transfers

Another way to send money to the UK is to use PayPal or peer-to-peer transfer platforms like Venmo.

PayPal

PayPal is a solid, easy-to-use method that has a reputable dispute resolution process, secure technology, and great protection against fraud. 

However, you should be aware of the fees associated with sending money internationally over PayPal. PayPal charges both a percentage fee and a flat dollar fee per payment, depending on the amount of money you’re sending.

When sending money through PayPal, you should also understand that you run the risk of account holds, declined payments, long payment times, and even payment cancellations.

Peer-to-peer currency transfers

The benefit of peer-to-peer currency transfers is that they’re faster and less expensive than using a bank. However, while they might be quicker than most methods, they come with the risk of not being as safe.

Many peer-to-peer platforms don’t have the best security in place to protect their users, and the exchange rates aren’t nearly as competitive as other methods. The processes might also be slow, taking days for payments to clear.

Send money through a global account

By far the best option for businesses that want to send money to the UK securely and cost-effectively is to open a global business account

With an Airwallex global multi-currency account, you’ll pay just 0.5% above the interbank exchange rate.

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. Gone are the days of waiting around for your international payments to clear.

Perhaps the greatest benefit of owning a global, multi-currency account from Airwallex is that you can collect different currencies in your account without exchanging them. In practice, this means you can receive a payment from your UK customers in GBP, hold it in your account, and then transfer it to your UK employees when the time comes without forced or double conversion.

Which option is right for you?

If your business regularly sends transactions internationally to the UK, opening an Airwallex foreign currency account is by far the cheapest and fastest way to send money.

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

Airwallex also makes life easier for our customers by partnering with other businesses that help expanding eCommerce retailers. 

For example, many businesses expanding to the UK don’t initially realize that they’ll have to know how to navigate value-added tax, or VAT. VAT is the UK’s version of a sales tax, and all foreign sellers operating in the UK need to register for VAT and keep it in mind when calculating prices.

“When prices are calculated, this is often first done with net values. Keep in mind that the price you have calculated is the price you want to receive for your product or service, and to that you need to add the VAT.”

- hellotax

This is where hellotax comes in. Hellotax can automate your VAT registration and get you a VAT number quickly, ensuring you maintain compliance and freeing you up to focus on your business.

Whatever you need to facilitate your business in the UK, chances are that Airwallex — or one of our patterns — can help.

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 short and informative demo video.

Related article: The benefits of virtual credit and debit cards

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Margaret Nguyen
Marketing Manager

Margaret runs marketing for Airwallex US, working with great companies across eCommerce, consumer goods, consulting, and tech to deliver excellent experiences to shared audiences.

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