Sending Money Overseas article discussion

bristolian

colsten said:

be very careful - none of the currency transfer services is FSCS protected. If you want FSCS protection (which I would always want if I can have it), Starling Bank is your best option. They have the same, or better, rates as Transferwise. You have to have a UK address to get a Starling account though.

Starling started using Wise (formerly called Transferwise) to handle international transfers in 2017: https://www.wired.co.uk/article/transferwise

The amount Starling quoted me yesterday was identical to Wise's quote (on Monito), so I guess Starling still uses Wise.

Given that, is Starling's FSCS protection actually any help? It must cease as soon as your money leaves Starling and arrives at Wise, so it's no different from sending funds from any FSCS-protected account to Wise.

The only advantage I can imagine to using Starling + Wise over any other bank + Wise would be if Starling does money-laundering checks instead of Wise: in that case, your funds would still be protected whilst the checks were being done. But I don't know which of them does the checks. (Also, recent reviews suggest Wise has become a nightmare: https://www.consumeraffairs.com/finance/transferwise.html)

A more general issue is what happens when your money leaves any FSCS-protected institution on its way abroad. I gather it can go via partner banks or by SWIFT, SWIFT Go, through an FX broker, and maybe other options, but is there any protection?

The speed of options on monito ranges from "minutes" to days; almost all take between 1 and several days, but larger amounts can take up to 10 days. For the larger amounts I imagine the money is mostly sitting somewhere waiting for someone to check for money-laundering.

According to wikipedia's SWIFT page: "Though widely utilized, SWIFT has been criticized for its inefficiency. In 2018, the London-based Financial Times noted that transfers frequently "pass through multiple banks before reaching their final destination, making them time-consuming, costly and lacking transparency on how much money will arrive at the other end."" https://web.archive.org/web/20190927142951/https://www.ft.com/content/631af8cc-47cc-11e8-8c77-ff51caedcde6

If your funds take multiple days to pass through multiple banks outside the UK, the part of the trip that's FSCS-covered might be quite small.

Even in the simplest and seemingly-safest case, if you had, say, HSBC accounts in your name in both the UK and the destination country, in the very unlikely event HSBC failed in the other country, the FSCS would be no help (though hopefully the other country would have its own equivalent to FSCS).

MaryKin

I’ve discovered recently that it’s not possible to transfer to Ghana via Wise (as I’ve been doing for over a year sending money to a charity). After some frustration about the lack of information from Wise I’ve found that it’s to do with Ghana tightening up on unlicensed remittance providers, of which Wise is one of 8 that are not able to operate. Wise say they are ‘actively working on the problem’ but with no timescale. I’m thinking of using XE instead - is this a good option?

eDicky

MaryKin said:

I’ve discovered recently that it’s not possible to transfer to Ghana via Wise (as I’ve been doing for over a year sending money to a charity). After some frustration about the lack of information from Wise I’ve found that it’s to do with Ghana tightening up on unlicensed remittance providers, of which Wise is one of 8 that are not able to operate. Wise say they are ‘actively working on the problem’ but with no timescale. I’m thinking of using XE instead - is this a good option?

XE are a very long-established firm, I used to use them before cheaper alternatives arose and I'm not aware of their current cost in comparison but they've probably improved in order to compete. I could PM you a code that gives us both £25 discount but it looks like minimum transfer of £1000 applies.

Try using the comparison site monito.com to see what else is available to Ghana.

Londoner111

Hello

After a little guidance here.... I live in London and am looking to transfer around US$100k to an Australian bank account.

I see that the MSE guide suggests (amongst others) Wise for amounts <£5k and (amongst others) Currencies Direct for larger amounts. I don't entirely follow the logic, or am I missing something?

Wise appears to convert based on the mid-market rate (which as far as I can tell, is as good a rate as can be expected. Right?). It adds a transparent fee (for around US$100k the fee is around $220 I think). I'm pretty sure that Currencies Direct and TorFX (like high street banks) convert using a less favourable rate (to me) than the mid-market rate, don't they? Therefore, the larger the amount to be transferred, the more reason to go with a company offering a better exchange rate, right?

I presume there are considerations like FSCS protection? Any other risks?

Am I missing something here? Why would MSE not suggest Wise (or similar, if there are any - I'm not promoting Wise here) for larger transactions?

Any thoughts/insights greatly appreciated.

robatwork

I've used Wise for some large transactions.

Their process is faster than it used to be, but there's still a grey zone, where your money is in transit. At that point it's not altogether protected, although the risk is very small and I think worthwhile for the huge saving over a bank transfer.

Because of this, it's good practice to transfer in smaller amounts, for example 5 x $20,000. It won't cost more in fees, but increases the inconvenience. Doubly so if your bank, like mine, insist on you calling to go through their AML check EVERY time you transfer, even if you tell them what you are doing on the first call and making a note on your file.