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Why you shouldn’t use your bank to transfer money abroad

Whether you’re an individual or a business, sending money abroad can be time-consuming and expensive – but it doesn’t have to be. 

If you’re paying a supplier in Beijing, reimbursing a freelancer in Warsaw or sending a cash gift to family in Abuja, transferring funds with your bank or building society might seem like a sensible move, but that couldn’t be further from the truth. Continue reading to find out why, and what you should do instead.

International bank transfers are expensive

You’ve worked hard for your money, so the last thing you need is for your bank to help themselves to a share of it. Bank transfers may seem easy and convenient: after all, your money is already there.

The truth is, you should avoid sending money internationally with your bank, as their services are filled with hidden costs, fees and charges including:

The outgoing transfer fee

This is a flat fee, often stated up front, that you pay for sending money to a loved one. On the surface, it might seem low and reasonable – but you should note that it isn’t the only cost you’ll incur when using your bank. Banks sometimes charge you or your family a fee for collecting or releasing the funds on the other end. 

An incoming transfer fee

As mentioned above, once your money has finally arrived at its destination via your bank, a nasty surprise sometimes awaits the recipient. That surprise takes the form of an incoming transfer charge. 

When this happens, it’s because your recipient’s bank are imposing a fee to release the money, further reducing the final amount that appears in your recipient’s account.

The exchange rate markup

The exchange rate mark-up is a cost so well-hidden that many customers don’t even know they’re paying it. All the bank does is quote an exchange rate that’s 10-15% less competitive than the real (mid-market) rate, then relies on the customer not noticing the difference. 

Banks and high street services make a lot of profit on their exchange rate mark-up, particularly when customers need to send a large, one-off payment or if they’re sending money at short notice, such as during a family emergency. If you want a better deal, read our guide on how to get the best exchange rate when sending money abroad

Fees for transferring money between banks

Money transfer is a bit like sending a parcel overseas, in that the funds may make a few stops along the way. 

In the case of money, the electronic cash is sometimes switched from one intermediary bank to another before reaching its final destination. If this is the case, each bank is entitled to take a fee from the money that you’ve sent (known as a bank-to-bank transfer charge), leaving your recipient out of pocket.

Worse, there’s no way of knowing whether fees will apply before you send. Imagine sending £100 to somebody in a birthday card and finding out that the post office had opened the card and taken out a share of the money before delivering it. That’s exactly what banks are doing when you send money abroad with them.

It’s not all bad news, though. There is a way that you can use a bank to transfer money abroad cheaply. If your bank has an international branch or partner operating underneath the same umbrella, you may be able to send money fee-free. Some banks also offer fee-free money transfers as a feature of their premium accounts. Bear in mind, however, that you’ll still pay their exchange rate markup and that bank transfers are usually pretty slow…

Bank transfers are slow

Despite advances in technology, banks still use a service called SWIFT to send money abroad. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication – and it isn’t swift at all. 

Back in 1973 when SWIFT was launched, it was the best way to send money home. In 2020, with modern money transfer solutions like Azimo around, SWIFT looks like a relic from the past. With expensive SWIFT transfers taking up to seven working days, there is rarely a good reason to send your money this way.  

Use a dedicated transfer service

If you’re sending money abroad, you need a service that is:

  • Fast
  • Cheap
  • Safe
  • Easy to use

A dedicated money transfer service like Azimo will give you all of the above, because they’re designed specifically for sending money abroad. 

Azimo combines a single, low fee with a great exchange rate to give you a better deal. In some cases, we’re up to 75% cheaper than using your bank or a high street money transfer shop. 

Even better, Azimo is fast. We offer instant or one-hour transfers to 80+ countries, depending on the delivery method you choose. 

And with bank-level anti-fraud and encryption technology, your money is always safe with us. Download our award-winning apps on iOS and Android, or use our website to register today. It takes just two minutes and your first two transfers are fee-free.

Azimo is the faster, cheaper way to send money to more than 200 countries and territories worldwide. It takes just two minutes to create an account and start sending money.