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How to Send Money Abroad Cheaply: 7 Best Ways to Save Money on International Transfers

Sending money abroad doesn’t have to cost a fortune. Whether you’re supporting family overseas, paying for property abroad, or making business payments, the fees and poor exchange rates from traditional banks can quickly add up to hundreds of pounds in extra costs.

The good news? There are now plenty of cheaper alternatives that can save you significant money on every transfer. From specialist money transfer services to digital payment apps, you have more options than ever to send money internationally without breaking the bank.

In this guide, we’ll walk through the cheapest ways to send money abroad, compare the real costs of different services, and show you exactly how to get the best deal on your international transfers.

Understanding the True Cost of International Transfers

Before diving into the cheapest options, it’s crucial to understand how money transfer companies actually make their money. Most providers hit you with costs in two ways: transfer fees and exchange rate markups.

Transfer fees are the obvious cost – the upfront charge you see advertised. But the hidden cost often lies in the exchange rate markup. Many services offer “fee-free” transfers but make their profit by giving you a worse exchange rate than the real market rate (called the mid-market rate).

For example, if the real GBP to EUR rate is 1.15, a provider might offer you 1.12 and pocket the difference. On a £1,000 transfer, that 3 cent difference costs you £26 – often more than any upfront fee.

Always compare the total cost by looking at both fees and the exchange rate offered. The provider advertising “no fees” might actually be more expensive than one charging a £5 fee but offering a better rate.

Digital Money Transfer Services: Your Best Bet for Cheap Transfers

Digital money transfer platforms have revolutionized international payments, offering rates and fees that traditional banks simply can’t match. These online-first companies have lower overheads and pass the savings on to customers.

Wise (formerly TransferWise) is often considered the gold standard. They use the real mid-market exchange rate and charge a transparent fee (typically 0.4-2% depending on the currencies involved). For a £1,000 GBP to EUR transfer, you’d pay around £4-8 in fees.

Remitly specializes in transfers to developing countries and often offers competitive rates for corridors like UK to India or Philippines. Their express service costs more but delivers within minutes.

WorldRemit offers multiple delivery options including cash pickup, mobile money, and bank deposits. This flexibility makes them excellent for recipients who don’t have traditional bank accounts.

These services typically process transfers within 1-3 business days and offer better exchange rates than high street banks. Most also provide mobile apps with live tracking, so you and your recipient know exactly when the money will arrive.

Traditional Banks vs Modern Alternatives: The Cost Comparison

Here’s how different transfer methods stack up for sending £1,000 from the UK to various destinations:

The difference is stark. While your bank might charge £60+ for a £1,000 transfer, Wise could do the same transfer for under £10. Over multiple transfers, these savings add up quickly.

Cash Transfer Services: When Speed Matters Most

Sometimes you need money to arrive within minutes rather than days. Cash transfer services like Western Union, MoneyGram, and Ria specialize in rapid transfers, often with cash pickup options for recipients.

These services shine when sending money to areas with limited banking infrastructure or during emergencies. Western Union has over 500,000 agent locations worldwide, making it possible to send money to virtually anywhere.

However, convenience comes at a cost. Express cash transfers typically involve higher fees and worse exchange rates. A Western Union instant transfer might cost 3-5% of the transfer amount in total fees and markups.

To minimize costs with cash services, consider their economy options. Western Union’s standard service (arriving in 1-3 days) costs significantly less than their instant transfer option while still offering the convenience of cash pickup.

Bank-to-Bank Transfers: SWIFT vs Correspondent Banking

Traditional bank transfers use the SWIFT network, which connects banks globally. While secure and reliable, SWIFT transfers often involve multiple intermediary banks, each taking a fee.

A typical international bank transfer might pass through 2-3 correspondent banks before reaching the recipient. Each bank can charge £10-25 in intermediary fees, plus your sending bank’s fee of £15-30. The receiving bank might also charge a fee.

Some newer banks offer better international transfer rates. Starling Bank, for instance, charges no fees for transfers within the EU and offers competitive rates elsewhere. However, they still can’t match specialist transfer services for pure cost-effectiveness.

For large transfers (over £10,000), some banks offer preferential rates. If you’re moving substantial sums, it’s worth negotiating with your bank’s international transfer team.

Mobile Payment Apps: The New Frontier

Mobile payment apps are increasingly offering international transfer options, though availability varies by country and region.

PayPal allows international transfers to friends and family in many countries, though their exchange rates aren’t competitive with specialist providers. The main advantage is convenience – if both parties already use PayPal, transfers are instant.

Revolut offers international transfers at competitive rates for premium subscribers. Their standard plan includes limited free international transfers per month, with additional transfers charged at cost.

Monzo and other challenger banks are gradually adding international transfer features, often partnering with services like Wise to offer competitive rates while maintaining the convenience of banking within your existing app.

The key advantage of app-based transfers is user experience. Everything happens within an app you’re already familiar with, with instant notifications and clear tracking.

Cryptocurrency: The Cutting-Edge Option

Cryptocurrency presents an interesting option for international transfers, particularly for tech-savvy users and certain corridors where traditional banking is expensive or slow.

The process involves converting your pounds to cryptocurrency (like Bitcoin or stablecoins), sending it to the recipient’s crypto wallet, and them converting back to local currency. This can bypass traditional banking entirely.

Potential advantages include:
– Near-instant transfers (minutes rather than days)
– Very low fees (often under 1%)
– No intermediary banks or traditional money transfer companies
– Works 24/7, including weekends and holidays

However, significant challenges exist:
– Both parties need crypto knowledge and wallets
– Regulatory uncertainty in many countries
– Price volatility can affect transfer value
– Limited cash-out options in some regions
– Tax implications may be complex

Cryptocurrency transfers work best for regular, tech-savvy users sending to countries with developed crypto infrastructure. For occasional users or those sending to areas with limited crypto adoption, traditional methods remain more practical.

Making Your Choice: Factors Beyond Just Cost

While cost is important, other factors matter when choosing how to send money abroad:

Speed requirements: Emergency situations call for instant transfers, even if they cost more. For planned payments, slower, cheaper options work better.

Recipient convenience: Consider how your recipient prefers to receive money. Bank transfers work if they have accounts, but cash pickup might be better in areas with limited banking.

Transfer frequency: Regular senders benefit from accounts with specialist providers and potentially preferential rates. One-off senders might prefer the simplicity of familiar services.

Transfer amount: Larger transfers often qualify for better rates, while small transfers might be cheapest through apps with flat fees.

Regulatory requirements: Some countries have strict controls on incoming transfers. Citizens Advice provides guidance on financial regulations that might affect your transfers.

Conclusion

Sending money abroad cheaply is entirely achievable with the right approach. Digital money transfer services like Wise typically offer the best combination of low costs and reliability for most situations. Traditional banks remain the most expensive option, often costing 3-5 times more than modern alternatives.

Remember to always compare the total cost – including both fees and exchange rate markups – rather than just looking at advertised transfer fees. For regular international transfers, the savings from switching providers can easily amount to hundreds of pounds per year.

Consider your specific needs: instant cash pickup for emergencies, bank transfers for regular payments, or mobile apps for convenience. With so many options available, there’s no reason to overpay for international money transfers.

Finally, always verify that your chosen provider is properly regulated. In the UK, look for FCA authorization, while in other countries check for appropriate local licensing to ensure your money is protected.

Next read: Planning to move abroad? Check out our complete guide on managing finances when living overseas: /managing-finances-abroad