Why Businesses in the UK Need to Send Money Abroad
Many UK businesses today operate in a globalised environment. A company might source materials from suppliers in Asia, pay software developers in Eastern Europe, or maintain a remote customer service team in North America. These operations require regular international money transfers, sometimes in multiple currencies.
In such cases, efficiency and cost become critical. Sending large volumes of payments with high fees or poor exchange rates can significantly cut into profit margins. Even occasional transactions can add up over time, especially when handled through traditional banking channels that don’t prioritise cross-border efficiency.
The Default Option: Sending Money Through High Street Banks
For many businesses, the first instinct is to rely on their existing high street bank for international transfers. The relationship is already in place, the process feels familiar, and there’s an assumption that a major bank is the safest choice.
However, this default option can be one of the most expensive and time-consuming ways to send money abroad. Traditional UK banks often charge flat fees ranging from £15 to £25 for each transaction. On top of that, they typically apply a foreign exchange markup of 2.6% to 3.5% above the interbank rate—the baseline rate at which banks trade currencies among themselves.
These costs can accumulate rapidly. For instance, a business paying $100,000 annually to international suppliers might end up losing over £3,500 to fees and inflated exchange rates. That’s money that could be reinvested into operations, hiring, or product development.
Understanding the SWIFT Network
Most international transfers processed by banks are conducted via the SWIFT network. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. It is a messaging system, not a payment processor, that allows financial institutions to securely exchange instructions about money movements.
Here’s how a typical SWIFT-based transfer works:
- The sender’s bank creates a payment message.
- If the recipient’s bank is not directly connected to the sender’s bank, the message is relayed through one or more intermediary (correspondent) banks.
- Each bank involved in the process may charge a handling fee.
- Once all checks are completed, the funds are released to the recipient.
While secure and widely used, the SWIFT system is slow and expensive. Transfers can take anywhere from one to five working days, depending on the number of intermediaries and regulatory checks involved. This method also lacks transparency, with little insight provided to the sender about where the money is or how long the process will take.
The Problem with Intermediary Banks
One of the most overlooked costs of international bank transfers is the fee charged by intermediary banks. When two banks don’t have a direct relationship, the transaction must pass through third-party banks, each of which adds its own fee—often without informing the sender in advance.
These intermediary fees can significantly reduce the final amount received. For businesses trying to pay exact invoices, this can cause accounting headaches or force them to overpay just to ensure the right net amount arrives.
Moreover, intermediary involvement often results in delays. Time zone differences, manual processing steps, and additional compliance requirements mean funds can get stuck for days in transit.
Hidden Foreign Exchange Costs
Exchange rates are another source of hidden costs. While transfer fees are often advertised upfront, the markup on foreign exchange is usually buried in the transaction.
Banks commonly apply a spread of 2.6% to 3.5% above the interbank rate, depending on the currency and transfer amount. This spread may not sound substantial, but for high-value transfers, it quickly adds up. For example, converting £50,000 into US dollars with a 3% markup would cost £1,500—without any additional processing fees included.
This hidden fee structure makes it hard to know exactly how much you’re paying. It also prevents businesses from benchmarking providers or identifying cost-saving opportunities. Worse, exchange rates can fluctuate throughout the day, and banks may apply less favourable rates at the time of processing rather than at the time of transfer initiation.
Slow Transfer Times Impact Business Performance
Speed matters when it comes to international money transfers. Delays in payment can lead to late delivery of goods, missed deadlines, or even reputational damage with suppliers and employees. With the SWIFT network, the average transfer takes two to five business days.
These delays are especially problematic for businesses operating in fast-paced industries or managing global teams. For example, late payroll can reduce employee satisfaction, while delayed payments to suppliers may lead to strained business relationships or service interruptions. Even when a transaction is flagged as urgent, traditional banking systems often have limited capacity to expedite the process due to legacy infrastructure and manual approval chains.
Lack of Transparency in the Transfer Process
Another frustration with traditional international transfers is the lack of real-time tracking and transparency. Once a transaction is initiated, it often disappears into a black hole until it reaches its final destination.
This uncertainty can create unnecessary stress, especially when dealing with high-value payments or time-sensitive obligations. While some banks offer tracking tools, they rarely provide full visibility into where the money is in the chain or which intermediary has it.
In addition to this lack of visibility, businesses often don’t receive accurate cost breakdowns. It’s common to find out after the fact that the recipient received less than expected due to intermediary deductions or currency conversion differences.
Compliance Requirements and Regulatory Delays
Cross-border payments are subject to various compliance and anti-money laundering regulations. These rules are essential for preventing fraud and illegal activity, but they can also slow down transactions significantly.
Each bank in the transfer chain may conduct its own set of checks. If any issues arise—such as a mismatch in beneficiary details or concerns over the source of funds—the payment can be delayed until the problem is resolved. These delays are sometimes unpredictable, and resolving them may require documentation or manual intervention.
For businesses with ongoing international transactions, repeated delays due to compliance checks can affect cash flow and disrupt operations. It’s essential to understand that these checks, while necessary, are often slower and more rigid within traditional banking frameworks.
Complexity in Managing Multiple Currencies
Managing payments across multiple currencies introduces another layer of complexity. UK businesses that sell products in Europe, pay developers in India, and order supplies from the US, may need to regularly convert between GBP, EUR, USD, and INR.
Using a standard business bank account for these transactions means converting currencies frequently—each time incurring a markup or fee. This can lead to significant cumulative losses, not to mention the administrative burden of tracking each conversion.
Moreover, the inability to hold foreign currencies means businesses may be forced to convert immediately upon receipt, even when exchange rates are unfavourable. This creates a scenario where companies are not only losing money to fees but also exposing themselves to unnecessary currency risk.
The Financial Impact of Inefficient Transfers
For small and medium-sized enterprises, these inefficiencies can be devastating. Let’s break down the typical costs for a business sending £100,000 worth of payments internationally in a year using a high street bank:
- Transfer fees: £25 per transfer, 20 transfers per year = £500
- Foreign exchange markup at 3% = £3,000
- Possible intermediary bank deductions = £300+
Total potential cost: over £3,800 annually
These costs don’t even account for time lost, administrative overhead, and cash flow disruptions. Businesses operating on narrow margins may find these inefficiencies eating into their profitability year after year.
Why It’s Time to Rethink International Transfers
Legacy systems and outdated transfer models are no longer sufficient in a world where businesses must be agile, global, and cost-conscious. Traditional banks were not built for fast, transparent, low-cost international transactions.
Their models rely on intermediaries, fixed processes, and fee-heavy structures that no longer align with modern business needs. There is a clear need for smarter solutions that can deliver faster transfers, better exchange rates, and fewer fees.
Smarter Alternatives to Traditional International Transfers
International business is booming, but outdated financial systems can drag efficiency down and cost businesses more than they realise. We explored the challenges of sending money abroad using traditional high street banks, from high fees to slow transfer times and opaque exchange rates. We focus on the modern alternatives that businesses are adopting to simplify cross-border payments, reduce costs, and improve speed and visibility.
The Shift Towards Fintech and Digital Payments
As technology evolves, so do the tools available for managing international transactions. Fintech companies—short for financial technology providers—are transforming the landscape of global business payments. Unlike legacy banking systems that rely on outdated infrastructure, these platforms are built from the ground up to support international commerce.
They achieve this by replacing reliance on intermediary banks with more direct, efficient routing through local payment networks. Instead of routing payments through the SWIFT system, some providers use proprietary infrastructure to facilitate faster and cheaper payments using local rails. These modern systems aim to give businesses greater control, visibility, and flexibility when sending and receiving money across borders.
What Is a Local Payment Network?
A local payment network is a system that enables domestic transfers within a country or currency zone. For example, the UK has the Faster Payments system, while the Eurozone uses SEPA (Single Euro Payments Area). In the United States, systems like ACH (Automated Clearing House) and Fedwire dominate.
Instead of sending a transfer from the UK to a bank in France through SWIFT and intermediary banks, a modern platform might collect GBP in the UK via Faster Payments and then disburse EUR from a local account in France via SEPA. This method keeps the transfer within local systems at both ends, avoiding SWIFT entirely and saving both time and money.
This approach is commonly referred to as using “local payout rails” and is part of the reason why many businesses now prefer digital platforms over banks for international money movement.
How Multi-Currency Accounts Work
Multi-currency accounts, also known as global accounts, allow businesses to hold, send, and receive money in multiple currencies without the need to convert funds immediately.
With a multi-currency account, a UK-based business can receive payments in USD, EUR, AUD, and other major currencies and keep those balances intact without being forced to convert them into GBP upon receipt. This provides several key advantages:
- Businesses can wait for favourable exchange rates before converting funds
- Payments to suppliers or staff in matching currencies don’t require conversions
- Companies avoid repeated exchange fees on round-trip conversions
For example, if a UK company collects EUR payments from EU clients and pays suppliers in EUR, it can manage both sets of transactions within the same currency. This eliminates the need to convert EUR into GBP and then back again into EUR, thus removing unnecessary foreign exchange fees.
Reducing Exchange Rate Costs
One of the most significant advantages of modern cross-border payment solutions is access to more competitive exchange rates.
Traditional banks apply substantial markups to the interbank rate—the rate at which banks trade currencies with each other. These markups are often hidden within the rate provided to the customer. However, many modern platforms provide much lower and more transparent markups, often around 0.5% to 1%.
Even small differences in rates can lead to big savings over time. For businesses making regular transfers worth tens of thousands of pounds, lower markups can equate to thousands saved annually.
Additionally, some platforms allow businesses to set currency conversion triggers or rate alerts. This means that currency can be converted automatically when a preferred rate is reached, giving businesses more strategic control over their FX exposure.
Locking in Exchange Rates
Currency markets are volatile. Rates change by the second, impacted by interest rates, economic reports, political events, and more. For businesses making international payments, this volatility can be risky.
One way to manage that risk is through forward contracts or rate-lock features, which some digital platforms provide. These tools allow businesses to lock in an exchange rate for a specific period or amount, securing today’s rate for a future transaction.
This is particularly useful for businesses that:
- Pay recurring international invoices
- Run monthly payroll in foreign currencies
- Receive large payments from customers abroad
With a locked rate, businesses can plan and budget more effectively, avoiding surprises due to market swings.
Faster International Payments
Time is often critical when making cross-border payments. Waiting several days for funds to arrive can cause operational slowdowns, missed supplier deadlines, or employee dissatisfaction.
Modern platforms that use local rails can significantly reduce transfer times. In many cases, payments can be settled within the same day or even within hours, depending on the destination country and time of submission.
For example, payments to countries within the EU can often be completed in one business day via SEPA. Transfers to the US, Australia, and other well-connected countries may also benefit from same-day processing.
The faster speed also improves business relationships. Suppliers paid on time or early are more likely to offer favourable terms, while employees receiving prompt payrolls enjoy increased trust and morale.
Transparent Fees and Full Cost Visibility
One of the main criticisms of traditional banking transfers is the lack of transparency around costs. Businesses often don’t know the full extent of fees until after the transaction is complete. This uncertainty makes financial planning more difficult and creates friction in vendor relationships when payments arrive short.
Modern payment platforms typically publish clear fee structures and provide upfront exchange rate information. This allows businesses to calculate the true cost of a transfer before sending it. Some platforms even provide comparison tools or real-time calculators, enabling users to compare transfer costs and rates between different providers before committing.
Eliminating Double Conversion Losses
A common issue with global payments is the problem of double conversions. This occurs when a business receives funds in a foreign currency that is immediately converted into GBP by the receiving bank, and then must convert it back to the original currency to pay a supplier.
Each conversion involves a spread or markup, creating unnecessary costs. By using a multi-currency account, businesses can accept and hold funds in the same currency in which they were sent, eliminating forced conversions. This is particularly helpful for ecommerce businesses selling in multiple countries, service providers with international clients, and firms with recurring overseas costs.
Using Payment Automation and API Integrations
Efficiency isn’t only about cost and speed. As businesses grow, managing international payments manually becomes increasingly burdensome. Finance teams must keep track of exchange rates, coordinate invoices, verify payment confirmations, and monitor bank fees across multiple jurisdictions.
Modern platforms often come with automation tools and application programming interfaces (APIs) that allow payments to be triggered based on preset conditions or integrated with accounting, payroll, and ERP systems.
Benefits of automation and integration include:
- Bulk payment processing across currencies
- Reduced human error in recurring payments
- Real-time reconciliation of incoming and outgoing transactions
- Scheduled payments for recurring supplier or payroll needs
These capabilities allow finance teams to operate more strategically, with less time spent on manual administration.
Streamlining Global Payroll
Businesses with international teams face the additional challenge of managing payroll across currencies. Paying employees or contractors in their local currencies can create a significant administrative burden if done through conventional bank transfers.
Modern platforms enable businesses to run multi-currency payroll more efficiently. With the ability to hold and send funds in various currencies, companies can pay staff in their local currency without having to process individual international transfers. This reduces overhead, ensures timely payments, and improves the employee experience—particularly important in retaining top talent in global teams.
Managing Compliance and Regulatory Requirements
Cross-border payments come with regulatory responsibilities, including Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. Traditional banks often have lengthy processes to verify documents, approve beneficiaries, or check flagged transactions.
Modern platforms typically use automated compliance checks that are embedded into the onboarding and payment process. This reduces delays and allows for faster account setup and fewer interruptions. While automation improves speed, it also ensures that businesses stay compliant with local and international regulations, reducing the risk of fines or rejected transactions.
Improving Cash Flow Through Better Payment Planning
Cash flow is the lifeblood of any business, and international transfers can impact it significantly. Delays, poor rates, and high fees all contribute to inefficiencies.
With a modern system, businesses gain tools to:
- Track payments in real time
- Time their currency conversions for favourable rates
- Match receivables and payables in foreign currencies
- Forecast cross-border cash flow with greater accuracy
This improved visibility and predictability help financial teams make more informed decisions, allocate funds more effectively, and reduce the need for costly short-term financing to cover gaps caused by slow settlements.
Why Modern Payment Infrastructure Matters
The core problem with traditional transfers is that they were built in an era that predated digital business. While reliable, they lack the flexibility, speed, and cost-efficiency that modern businesses demand.
Digital platforms are not only reshaping how companies send money abroad—they’re also redefining the role of finance in a global business context. By combining real-time capabilities, automation, and multi-currency support, they allow businesses to operate internationally with fewer barriers and less friction.
Choosing the Best Way to Transfer Money Abroad from the UK
Cross-border payments are a crucial function for many UK businesses, but they can come with challenges. From high transaction fees and unpredictable exchange rates to slow processing times and regulatory complexity, managing international transfers has traditionally been an operational burden. However, as we explored in earlier sections, modern alternatives to legacy banking systems offer more efficient, flexible, and cost-effective ways to move money globally.
We focus on the practical considerations for choosing the right international payment solution for your business. Whether you’re a small business expanding globally or a mid-sized company with recurring overseas obligations, understanding what to look for in a solution will help you avoid unnecessary costs and delays.
Understanding Your Business’s Transfer Needs
Before evaluating different transfer options, it’s important to understand your own operational requirements. Every business has unique needs, and the right solution will depend on several key factors:
- How often do you make international payments?
- What countries do you send money to?
- In which currencies do you operate?
- Do you need to pay suppliers, contractors, or employees?
- Are you collecting payments in foreign currencies?
Mapping these details helps determine whether you need a full-featured global account, access to local payout rails, or just a cost-effective way to send occasional international transfers.
Evaluating Transfer Frequency and Volume
The number and size of international payments you make will significantly influence the kind of solution you need. Businesses that only send a few transfers per year might prioritise simplicity and low upfront fees. In contrast, companies making frequent or high-value transfers should focus on optimising for lower exchange markups, faster settlement times, and fee transparency.
If your international payments are seasonal or project-based, it may also make sense to consider solutions that offer flexible terms or no monthly minimums. Understanding your transfer rhythm will help you avoid overpaying for features you don’t need—or underestimating the potential savings from more advanced capabilities.
Speed of Transfers
Speed is essential when paying time-sensitive invoices, employee salaries, or responding to urgent business needs abroad. Traditional bank transfers via SWIFT can take up to five business days to complete, especially when multiple intermediaries are involved.
Modern platforms that use local banking networks or proprietary infrastructure can often deliver same-day or next-day transfers. For businesses in ecommerce, SaaS, and services industries, faster payments can help build trust with suppliers, attract international talent, and prevent business interruptions.
Always assess what transfer speeds are available to the countries you pay most frequently. Some platforms offer country-specific timeframes based on local infrastructure, and understanding these can help you plan more accurately.
Currency Exchange Rates and Margin Transparency
Exchange rate markups are often the largest hidden cost of international transfers. Banks typically quote rates that are 2.6% to 3.5% above the interbank rate, whereas newer platforms often offer lower markups in the range of 0.5% to 1%.
The challenge is that many providers don’t clearly display how their rate compares to the interbank rate. When evaluating a solution, look for transparent pricing models that either state the markup directly or allow you to compare against the live market rate.
Some tools also offer real-time calculators that show the exact amount your recipient will receive in their local currency, factoring in all fees. This kind of visibility is vital for budgeting and forecasting, especially for businesses that make high-volume or recurring payments.
Support for Multi-Currency Operations
If your business operates internationally—especially if you invoice clients or receive revenue in multiple currencies—it’s important to choose a solution that supports multi-currency functionality.
A platform with multi-currency accounts allows you to:
- Receive payments in local currencies without forced conversions
- Hold funds in multiple currencies and convert only when rates are favourable
- Pay suppliers and staff in their local currency using held balances
This capability reduces unnecessary conversion fees, protects you from market volatility, and gives you more flexibility in managing your global cash flow. When comparing providers, check how many currencies are supported, whether you can hold balances in foreign currencies, and whether you can fund outgoing payments using those balances without needing to convert first.
Fee Structures: Flat Fees vs Percentage-Based Fees
There are two common pricing structures for international transfers:
- Flat fees: A fixed fee per transfer, regardless of the amount
- Percentage-based fees: A percentage of the total transfer amount
Some providers combine both, while others include currency exchange markup as part of the cost. Understanding which pricing model works best depends on the size of your typical transfers.
For example, if you regularly send large sums of money, a small percentage fee can become more expensive than a flat fee. On the other hand, if you make many small payments, flat fees can add up quickly. Carefully calculate and compare the total costs for your average transfer sizes using each provider’s pricing structure.
Payment Methods and Accessibility
Depending on your business’s cash flow and banking setup, the availability of different funding and payment methods may be a factor.
Consider whether you need to fund your account via bank transfer, debit card, or direct debit. Some solutions also allow you to schedule payments or integrate with accounting software for automated reconciliations.
You should also check how recipients receive their funds—whether to their bank account, mobile wallet, or another method—and ensure these options match your vendors’ preferences.
A good international payment platform will offer a user-friendly interface with features like:
- Scheduled or recurring transfers
- Batch payment uploads for mass disbursements
- Mobile access for payment approvals on the go
- Real-time payment status updates
These features can simplify operations and reduce the time your team spends on administrative tasks.
Integration with Accounting and ERP Systems
As businesses grow, so does the complexity of managing payments. Manually tracking and reconciling international transactions in spreadsheets can become inefficient and error-prone.
Many modern platforms offer integrations with popular accounting and enterprise resource planning (ERP) systems. These integrations allow:
- Automatic reconciliation of inbound and outbound payments
- Real-time cash flow insights across currencies
- Easy reporting for tax and auditing purposes
Before selecting a provider, verify whether they integrate with your current finance software. Seamless integration can save your team hours each week and improve financial accuracy.
Regulatory Compliance and Data Security
Security and compliance are paramount when dealing with financial transactions—especially cross-border ones.
Ensure the provider is regulated by a recognised financial authority, such as the Financial Conduct Authority (FCA) in the UK. Compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations is also important to protect your business from legal and reputational risks.
In addition to regulatory compliance, verify that the platform uses encryption and data protection protocols to safeguard your sensitive financial information. Two-factor authentication (2FA), secure access controls, and transaction monitoring are features worth looking for.
Customer Support and Local Expertise
Even the most sophisticated payment systems can encounter occasional hiccups. When that happens, having access to responsive, knowledgeable support can make a huge difference.
Evaluate the quality of customer support offered by each provider. Key questions to ask include:
- Is support available via phone, email, and live chat?
- Do they offer support in your time zone?
- Are there dedicated account managers for business customers?
- How quickly do they resolve payment issues?
Having access to support teams that understand international banking challenges and local market nuances can help you resolve issues faster and maintain strong relationships with your global partners.
Role of Real-Time Tracking and Notifications
Knowing where your money is—and when it will arrive—is crucial for business planning and supplier coordination. Legacy systems often leave you guessing, especially when intermediary banks are involved.
A modern payment solution should offer real-time tracking and status notifications for all transfers. Some platforms even provide detailed logs showing each step in the transaction journey.
Real-time visibility improves communication with suppliers, reduces the risk of disputes, and helps you respond quickly to any issues or delays. It also improves internal financial reporting and cash flow forecasting.
Comparing and Testing Providers
Once you have a shortlist of providers, consider doing a few test transfers to compare:
- Speed of delivery
- Accuracy of exchange rate quotes
- Total cost including fees and markups
- User experience and support responsiveness
A small batch of sample payments can provide a wealth of insight. You’ll quickly learn which platforms offer the features, reliability, and transparency you need—and which ones fall short of expectations.
Also consider reading reviews or testimonials from similar businesses in your industry. Other users’ experiences can shed light on hidden issues, such as processing delays, support quality, or unexpected fees.
Building a Long-Term Global Payment Strategy
As your business grows internationally, your payment needs may evolve. What works today may not be sufficient a year from now. For this reason, it’s wise to select a provider that can scale with you.
Look for solutions that support additional currencies, regions, and features as your needs expand. Some platforms also offer tools like currency hedging, bulk payments, or global tax compliance services that may become relevant down the line. Choosing a flexible, scalable solution ensures you won’t have to migrate systems again as your business enters new markets or adopts more complex financial operations.
Preparing for the Future of Cross-Border Finance
The future of international payments is rapidly changing. Innovations in payment technology, digital currencies, and real-time settlement systems are reshaping how businesses think about moving money globally.
UK businesses that adopt modern infrastructure today stand to benefit from faster payments, lower costs, and better financial control. By understanding the options and selecting the right provider, companies can build a strong foundation for sustainable, global growth.
Conclusion
In today’s interconnected world, sending money abroad from the UK is no longer a niche business function—it’s a critical operation for companies of all sizes. Whether you’re paying suppliers, managing global payroll, or collecting payments in foreign currencies, the methods you choose for cross-border transfers can have a significant impact on your business’s efficiency, profitability, and reputation.
As explored throughout this series, traditional banks and the SWIFT network continue to dominate legacy financial systems, but they often bring high fees, slow processing times, and limited transparency. These inefficiencies can erode your margins and slow down your operations at a time when speed and agility are key competitive advantages.
Modern financial solutions now offer viable alternatives. By using local payment networks, multi-currency accounts, and platforms built for international transactions, businesses can save on fees, access better exchange rates, and complete transfers in a fraction of the time. The ability to hold and send money in multiple currencies without forced conversions allows businesses to optimize for both cost and flexibility, while real-time tracking and integration tools streamline reconciliation and forecasting.
Choosing the right international payment solution begins with understanding your business needs—how much you transfer, how often, to whom, and in which currencies. With this clarity, you can evaluate potential providers based on speed, pricing transparency, compliance, user experience, and scalability.
Ultimately, transferring money abroad doesn’t need to be complex or expensive. With the right tools and strategy in place, your business can operate globally with the same ease and confidence as it does locally. By taking control of your cross-border payments, you’re not just avoiding unnecessary costs—you’re laying the groundwork for long-term international growth.