Banks vs Specialist Providers for Sending Money Abroad

Sending money abroad usually means choosing between your high street bank and a specialist transfer company. Both move money from your account to someone overseas, but they work differently, cost differently and protect your money differently.

The Financial Ombudsman Service handles complaints about all of them: high street banks, specialist money transfer and remittance businesses, online payment services and foreign exchange specialists¹. The choice is not about which is safer in a general sense. It is about what each one charges, which countries and currencies it covers, how it checks for fraud, and what happens to your money if the firm fails.

The biggest single difference is cost. A bank typically charges a transfer fee and applies an exchange rate margin, which is the gap between the rate you see on a currency converter and the rate you actually get. A specialist provider may charge a lower fee or none, but still applies a margin. The only way to compare is to look at the final amount the recipient receives, not the headline fee.

What banks and specialist providers each offer

A high street bank moves money through the same international banking system it uses for its own payments. You instruct the transfer through your branch, by phone or through online banking, and the money travels through correspondent banks to the recipient's account. The bank sets its own exchange rate and charges its own fee. The advantage is convenience: the money comes straight from an account you already hold, and you deal with a firm you know.

A specialist money transfer company does nothing but move money abroad. It may be a remittance business, an online payment service or a foreign exchange specialist¹. You set up an account, verify your identity, and instruct the transfer. The provider converts your money and sends it through its own network of banking partners. Some specialists offer cash collection abroad, mobile wallet delivery or regular payment plans.

The Payment Accounts Regulations 2015 require a payment service provider to offer a switching service between payment accounts denominated in the same currency and held with a provider in the UK⁶. This matters if you are moving your day-to-day banking, but it does not apply to one-off international transfers.

The practical difference is reach. A bank can send to most countries, but its rates and fees are set for its whole customer base. A specialist may cover fewer countries but at a lower cost for the routes it serves. Some specialists, such as the Post Office, offer an online or in-branch service for individual and business customers alike, with bank account transfers usually taking up to two working days depending on the receiving country⁷.

Hidden costs: the exchange rate margin as well as the fee

The fee is the visible cost. The exchange rate margin is the hidden one. When a bank or provider quotes you a rate, it is rarely the mid-market rate, which is the midpoint between buy and sell prices on the currency markets. The difference is the margin, and it is how most providers make their money.

The margin matters more on larger transfers. On a small transfer, a flat fee may dominate. On a large one, a small percentage margin can cost more than the fee. This is why comparing the final amount the recipient receives is the only reliable method.

For context on how margins work in another market, investment platforms charged foreign exchange fees ranging from 0.45% to 1.5% on amounts up to £5,000 for transactions on international shares and funds⁸. That is not a money transfer rate, but it shows the range of margins that can apply when currency is converted.

Fees may mean you save less than you expect⁹. A balance transfer fee of around 2 to 3% of the amount you are transferring is typical in the credit card market, and on a £2,000 balance at 3% you would pay a £60 fee¹⁰. The same principle applies to international transfers: a percentage charge on a large sum adds up quickly.

The Financial Services Consumer Panel has noted that in digital wallet markets, fees are either extracted from the interchange or waived in lieu of data usage¹¹. That is a different market, but it illustrates that "free" transfers are rarely free: the cost is recovered somewhere.

Countries, currencies and how payments are made

Banks and specialists differ in where they can send money and how the recipient gets it. A bank transfer requires the amount you want to send, the full name of the person you are sending to, their 6-digit sort code, their 8-digit account number, a payment reference, and whether you want the money sent straight away or at a later date and time¹². For international payments, you will also need an IBAN or account number in the destination country, and sometimes a BIC or Swift code.

Specialist providers may offer more delivery methods. Money can be paid to a recipient by bank transfer, cash or cheque¹³. Some providers offer cash collection at agent locations, mobile wallet delivery or card delivery. The method affects both cost and speed.

Cash remains important in some markets. In a survey of used car buyers in Scotland, the most common payment method overall was cash, bank transfer or debit card at 57%, particularly among buyers from independent dealers¹⁴. That is a domestic example, but it shows that bank transfer is not universal, and in some countries cash collection is the practical option.

The Post Office International Money Transfer service is available online or in branch for individual and business customers, and bank account transfers usually take up to two working days depending on the receiving country⁷. Speed varies by route, by cut-off time and by the banking hours in the destination country.

Fee waivers and special cases at the banks

Banks sometimes waive fees for specific purposes or destinations. Lloyds refunded its fee for payments made to Ukraine on and since 21 February 2022, done automatically within a few days¹⁵. It also stopped charging non-sterling transaction fees on Lloyds Bank credit card payments to non-UK based charities on and since 24 February 2022¹⁵.

These are exceptions, not the rule. Most banks charge for international transfers and apply a margin. If you are sending money for a charitable purpose or to a country experiencing a crisis, it is worth checking whether your bank has a temporary waiver in place.

Accounts formerly held with Lloyds (International Services) Limited until 1 August 2022 are classified as Group B Accounts for exchange rate margin purposes¹⁶. That is an internal classification, but it shows that the terms you are on can depend on when and where you opened your account.

The largest banks have to offer fee-free basic bank accounts. These include Lloyds (including Halifax and Bank of Scotland) and Barclays¹⁷. A basic account gives you a way to receive money and make payments without a monthly fee, but it does not change the cost of sending money abroad.

Scams on international payments and how each type of firm checks them

Authorised push payment (APP) scams are the second biggest type of payment fraud reported by UK Finance¹⁸. They happen when someone tricks you into sending money to an account they control. International payments are a common route because the money leaves the UK system quickly.

The reimbursement rules do not cover international payments. The APP fraud reimbursement requirement only applies to UK bank transfers⁴. If you send money abroad and it turns out to be a scam, you are not covered by the same reimbursement scheme.

Banks and specialists check payments differently. Some banks now have a warning when you transfer money to someone, prompting you to double check the details are correct and think twice about whether the person you are sending to is genuine¹⁹. Barclays will never send a link in an SMS message, and will never contact you by phone, text or email to ask you to move money to another account, help with an internal investigation, give device access, or reveal your PIN, PINsentry or other membership details²⁰.

If you receive a message from a friend or family member saying they need you to transfer money urgently, speak to them directly first to check it is them²¹. If someone is asking you to pay by bank transfer, it could be a sign that it is a scam²².

Investment scams often use international payments. Check the company on the Financial Conduct Authority's Firm Checker before you share personal details or send money²⁴. Holiday and travel refund scams frequently ask for bank transfers, which should be avoided²⁵.

Banks withdrawing older methods: cheques and banker's drafts

Cheques and banker's drafts are becoming harder to use internationally. From 14 May 2026, recipients overseas will not be able to pay in sterling cheques or banker's drafts sent from the UK to Barclays⁵. If you need to send money abroad, you will need to use an international bank transfer or a specialist provider.

The Financial Ombudsman Service handles complaints about cheques and banker's drafts, including cases where a cheque bounced after being paid in, a bank did not pay a written cheque or paid after cancellation, a cheque was lost, stolen or forged, or a fake or missing banker's draft was not refunded²⁶.

Bank branches and cash machines have been falling over the past decade as consumers increasingly use online banking and digital payments²⁷. Barclays is the individual bank that has reduced its network the most, with 1,236 branches now closed²⁸. In the South East, 179 Barclays branches have been shut, as well as 175 NatWest branches and 179 Lloyds branches²⁹. Only Barclays has not confirmed its data on branch closures²⁹.

Already there have been 314 branches scheduled for closure in 2026: 116 from Lloyds, 88 from Halifax, 40 from Santander and others²⁸. A further eight Lloyds branches and five Halifax branches are scheduled to close in 2027³⁰.

If you are switching banks, open a new account before closing the old one, cancel or move standing orders and direct debits, return unused cheques and cards cut into pieces, and leave enough money to cover uncleared cheques³¹. Where there is no arrangement, the old bank only has to provide a prompt and efficient service to help you close your account and must return any money due to you, including any interest³².

How your money is protected with a bank or a specialist provider

Banks protect your money via the Financial Services Compensation Scheme (FSCS)². If your bank goes bust, you will automatically get your money back³³. The FSCS limit for banks was increased from £85,000 to £120,000 per person per institution in December 2025². If you have money in multiple accounts with multiple banks that are part of the same banking group and share a banking licence, they are treated as one bank, with the £120,000 limit applying across all accounts³.

Specialist providers are different. The FSCS does not cover cases where the payment firm itself fails³. Most customer funds at payment firms are safeguarded through segregation, which means the firm must separate client funds from its business funds². If the firm fails, your money should be returned from the segregated pool, but you may need to make a claim to the administrator.

The FSCS may look through the payments firm to compensate its customers if the firm's UK safeguarding bank fails, but it does not cover cases where the payments firm itself fails³. The FSCS can only protect money held by UK branches of authorised banks and building societies³⁴. It cannot protect you if an e-money firm or payment services firm fails³⁴.

If you use a virtual current account, it is not covered by the FSCS. It is covered by e-money rules, with money kept safe at a different bank, but you would need to make a claim to the administrator if your provider failed³⁵.

If you use open banking to make a payment to a business directly from your bank account instead of using a debit or credit card, you lose Section 75 and chargeback⁸. That matters for consumer purchases, but it also illustrates the general principle: the protection you get depends on how you pay, not just who you pay.

Where to get help

If something goes wrong with an international payment, the Financial Ombudsman Service can look at complaints about high street banks, specialist money transfer and remittance businesses, online payment services and foreign exchange specialists¹. It may ask for any messages used for the international money transfer, such as a SWIFT or an MT103¹.

If you are not a Wise customer and sent money to a Wise account, get in touch with your bank²³.

MoneyHelper offers free, impartial guidance on choosing a bank account and on types of scam³⁵. Citizens Advice and Advice NI can help if you are having trouble opening or using a bank account³¹. StepChange Debt Charity offers free debt advice if an international payment has left you struggling³⁷.

If you are struggling with money problems, banks may be able to work with you to create a repayment plan, ease restrictions on savings accounts, reduce interest rates on arranged overdrafts or help you apply for one³⁸. Barclays mortgage support is available Monday to Thursday 8am to 8pm, Friday 8am to 7pm and Saturday 9am to 4pm, and Barclaycard support is available Monday to Friday 8am to 9pm and Saturday and Sunday 9am to 9pm³⁸.