How to make cheap international payments

My experience of living and traveling abroad means that I have a long history of making foreign transfers. Over this time I have learned how to transfer money in the most economical and efficient way. However, it was a more recent experience that made me delve deeper into researching cheap international payments.

I had previously only transferred larger sums as it’s usually the most economical way to send money. I had always been content with my U.K bank up to this point, as it’s online fee for transfers were the lowest in the U.K and it’s service was quite fast. However, I needed to transfer a smaller sum in this instance.

I proceeded as usual expecting the required funds to be transferred. However, when I checked later I saw that over 30% of the amount I had sent was missing. I was furious. I contacted my bank to investigate and they tried to fob me off with excuses, suggesting that I wasn’t aware of the transfer fees – even though I had been making transfers for over 15 years.

I put pressure on them to investigate further, and they later replied saying that their foreign intermediary bank had implemented new service fees on transfers. This is where the problems and costs involved with sending money abroad become apparent.

When you request to transfer money abroad with your bank, there is a fee for doing so. However, this is just your local bank’s fee for making the transfer. When the money is sent overseas, there are a whole line of intermediary banks who all take a cut from your money, and when you make the transfer, you have no idea of how expensive these intermediary fees can be. When you send large amounts, fees can be less apparent, but when you need to send smaller sums you are effectively being robbed.

How to lose the intermediary banksters and keep your cash!

cheap international payments

I’d heard of a service called Transferwise on an expat forum I frequented, but up to that point I had no reason to research it as I’d always been happy with my transfers. Their unique business solution was to minimise the process by bypassing intermediary banks. This cuts out unnecessary bank fees, allowing cheap international payments and savings benefits that they pass on to the customer.

They achieve this by having deposited funds with partner banks all over the world. This way there is no international transfer of money. You simply pay them, and then a partner bank in the country you select pays the funds into an account of your choice. There is also the benefit of fast transfers – usually within 24hrs, but my last transfer only took 4 seconds!

Transferwise also uses the real live exchange rate that you will see on Google for foreign currencies. This is the best market exchange rate and is significantly higher than that offered by banks. This means that Transferwise will always give you the highest amount of money transferred for either large or small sums.

These are huge benefits. I remember talking with friends from the U.S who used to say that foreign transfers often took 3-4 days and sometimes up to a week. This always seemed odd to me when most people would consider New York and Wall Street to be the epicentre of world banking and finance. I imagine that the system is just antiquated and bogged down by layers of bureaucracy and intermediaries that businesses like Transferwise are trying to disrupt.

Other great benefits of using Transferwise

Transferwise also allows you to open a borderless multi-currency account, which is an online bank account that lets you hold, convert or send up to 50 different global foreign currencies. You can make cheap international payments in different currencies with super low fees and receive funds in key currencies for free. Fees are on average 8x cheaper than with a U.K bank.

You can also spend your different account currencies with a MasterCard which has no annual fee or ATM withdrawal charges. If you spend in a currency that you hold in your account there are zero fees. If you want to spend in a currency that you do not hold then the card automatically converts at a super low fee.

Transferwise says that this type of account is ideal for travellers, expats and freelancers. I agree. For any person who travels or moves around between countries for work or pleasure on a regular or semi-regular basis, currency exchange is a constant problem. Your money is being stripped by high card fees, transfer fees, poor exchange rates, travellers cheque charges and ATM fees.

The multi-currency account offers a great solution to this. You can hold currencies in countries that you visit regularly and spend fee free on your card and avoid associated costs. Holding many currencies is not possible on a regular bank account, and even if you can hold some there is normally a lot of work involved. This account makes it a simple process.

How to take advantage of currency fluctuations to save money

Having access to an account where you can hold up to 50 foreign currencies allows you to potentially save more money by using hedging to maximise your funds. Hedging strategies are used by businesses to control their expenses. You can utilise this principle by monitoring your most used currencies and buying them when their price drops. Then, you can use them at a later point in time, giving you more spending power as rates rise.

How to open a Transferwise account to make cheap international payments

Opening a Transferwise account is super quick and easy. Once you have set up your account you can make cheap international payments in minutes. You can either fund you account quickly with a debit card or transfer funds online from your bank. I normally do the later, which only takes a few minutes and gives you a slightly lower fee when you make a foreign transfer.


Switching to making cheap international payments with Transferwise has been one of the best decisions I’ve made. I no longer have to worry about the fees I’m paying wether I’m sending large or small amounts, as I know that I’ll always be getting the best rate with the lowest fees compared to any bank.

  • Cuts out intermediary banks saving you money
  • You get the best rate with the lowest fees no matter how much you send
  • As there is no real ‘international transfer’ the funds are sent much faster
  • Get an international bank account and hold up to 50 currencies
  • Spend your funds on a MasterCard with super low to zero fees

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