There are many ways to send or transfer money to the USA or UK. The most common methods to transfer money have been services like Western Union, bank checks (or cheques) and traditional bank transfers, but now include modern methods of sending money like Paypal and Wise (formerly TransferWise). 

Hidden Costs of Money Transfers

Expats should compare the hidden costs to learn when one method of sending money is better for different situations. Aside from the exchange rates offered by each service, there are transfer fees which could be British word for an apartment. More fees or percentages, or even a combination of both. It’s important to compare all factors because sometimes people are limited by what they have access to or the urgency of getting the money to it’s destination quickly.

If you need to send money to family, transfer funds to another currency account, or make payments for overseas loans or bills, each transfer has its pros and cons while also possibly incurring tax implications, which is another discussion with expat tax experts.

Traditional Methods

Let’s explore the traditional bank methods to transfer or send money first. Fifteen years ago, there weren’t many options and sending money via bank transfers incurs hefty fees with Trash or garbage, British term. More exchange rates while taking weeks to complete. For instance, if the USD to £ Great British Pound (Sterling) More exchange rate is $1.22 to the pound, the transfer service/bank may give you $1.27, charging you more for each pound. On top of that little skim which adds up on large transfers, there may be a percentage or exchange fee, AND of course the transfer fee as well. 

Those fees might have come down a little (or not), but the costs and clearing time can still be enough to make you exasperated and look for faster money transfers with more cost-effective alternatives like PayPal, TransferWise, or other services.

This article may contain affiliate, partner, or sponsored links, where I may earn a small commission at no additional cost to you. (This helps keep the site going.)

Any reviews are my genuine opinion and any product aor services are recommended because I have heard of or had good experiences with and that I do or would happily pay for or buy.

“One of the first rules of transferring money overseas is avoid your bank,” said James Daley of Fairer Finance.

“They tend to offer you a poor exchange rate and charge high fees.” (2014, quoted by The Telegraph) [mfn] Winch, J. (2014). What is the cheapest way to send £100 abroad? Telegraph.co.uk. Available at: http://www.telegraph.co.uk/finance/personalfinance/money-saving-tips/10980535/What-is-the-cheapest-way-to-send-100-abroad.html  Accessed 25 Jun. 2015.[/mfn]

Sending Cheques (or Checks) from the USA to the UK

Sending a cheque to the USA or UK doesn’t save on the bank transfer fees, takes even more time, and incurs exchange fees for the recipient. It will take roughly a week in the mail, and up to eight weeks to clear after it has been deposited, but there will still be an exchange fee and poor exchange rate. Some banks won’t even accept foreign checks or have special requirements such as a separate currency account with a minimum balance. The Co-operative Bank stopped accepting foreign checks around 2017.

When you deposit your birthday check from Grandma for $200 and in six weeks get your credit for £100, you’d be right to feel a little (or a lot) ripped off.

Overseas transfers with Western Union

Western Union has been around for over 150 years, beginning as a telecommunications company, sending telegrams until 2006. When the telephone replaced the telegraph, money transfers became their primary business.

Now you can transfer money to most countries using their website, for a fee of course. The maximum online transfer is 4000 GBP. To send $100 (today calculated at £65.93), the transfer fee is £5.90 and the WU exchange rate is (5 pence / 8 cents ) per £1 different to the current live exchange rate.

$50 – £32.97  – fee £3.90
$100 – 65.93  – fee £5.90
$150 – 98.90  – fee 5.90
$250 – 164.83  – fee 9.90
$500 – 329.66  – fee 19.90

When you send money using the WU website, you’re given a money transfer control number (MTCN) to provide to the recipient so that they can collect their funds from an agent. It says you can also send money to a US bank account if you have the necessary bank details, which takes 2-4 business days, but I have not had the option, cash collection is the only option I’ve had, but it may be country dependant. Note if you go to an agent to send the money instead of online, the fees may differ from above.

Western Union Transfer Calculator
Agent Location Search

Modern Methods

Technology has contributed to advancements in financial services and the ability to send money faster and cheaper than timeworn traditional methods.

Sending money with Paypal

Paypal was an easy and instant answer to sending money online, initially established in 1998, and bought by eBay in 2002. It’s now a popular, easy, and safe method to send money between people and make purchases.

If you send money abroad to friends/family with PayPal, when using your bank account or PayPal balance the  “cross border fee” is between .3 – 2%. If you use a debit or credit card, the “cross border fee” is between 3.4 – 7.4% and a fixed fee (20p) applies.  [mfn]PayPal: https://www.paypal.com/uk/webapps/mpp/cross-border-and-conversion-fee[/mfn]
When the currency is converted, Paypal uses an exchange rate of approximately 2.5% markup on the wholesale exchange rate.

http://www.paypal.com

Sending money with TransferWise

TransferWise is a newer money transfer service, founded in 2010 by the founders of Skype and backed with investment from Richard Branson. [mfn]TransferWise (2014) https://transferwise.com/blog/2014-06/sir-richard-branson-joins-our-mission-to-stamp-out-hidden-fees/ [/mfn] Frankly, we had not heard of them before they got in touch with us in 2017.

Transferwise works differently from other transfer services, essentially, it holds currency accounts in multiple locations to eliminate the costly currency exchange transfer step and pass on the savings to its customers. It’s reported that some £3 billion ($4.5 billion) has been transferred via the Transferwise platform, with cost savings of more than £135 million compared to traditional bank transfers.[mfn]Lunden, I. (2015). A16Z Leads $58M Round In UK’s TransferWise To Ramp Up Its P2P Transfer Business. (online) TechCrunch. Available at: (Accessed 15 Jun. 2015) http://techcrunch.com/2015/01/25/a16z-leads-58m-round-in-uks-transferwise-to-ramp-up-p2p-remittance-business/[/mfn]

To use their service, you “upload” funds to TransferWise from your bank account and specify the details of the receiving bank account. This can be your own overseas bank, another person’s bank account, or a business bank account. According to their website, transfer time can take one to two working days for US – UK transactions. (I have been trying their borderless global bank account and some transfers are within hours, depending on the receiving bank.)

Pricing
TransferWise has adjusted its fees several times, lowering costs instead of increasing them. Check the latest pricing for their most recent fees.

Sending GBP to USD
When sending from GBP (£) there is a minimum £2 fee for sending money transfers, and a flat 0.5% service fee. There is a sending limit of £2000 if transferring using a debit card instead of a bank transfer.[mfn]https://transferwise.com/support/customer/portal/articles/1663571-gbp-transfers?b_id=8790 [/mfn]

Sending USD to GBP
When sending from USD ($) there is a minimum fee of $3 for transfers up to $300, a .85% fee on transfers up to $10,000, and 0.6% for amounts over the initial $10,000. There is also a 24-hour rate fix when transferring from USD (if the deposit is received within that 24 hours). The maximum payment amount is £1million. [mfn]https://transferwise.com/support/customer/portal/articles/1923639-pricing-for-transfers-from-usd[/mfn]

Note: The percentage rate on the transfer fees for Transferwise actually decreased since this article was written though the minimum fee increased a little. (2017)

How do the transfer services compare?

We calculated all the exchange rates and fees for a few amounts that people might wish to transfer, $250, $500, $1000, $5000 and $10,000. Where possible, we used the website calculators to quote the fees. We loaded the figures into a spreadsheet and created charts to compare the transfer rates.

TransferWise consistently blew the rest away, as shown below.