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Learn More: Money Transfers

Money transfers are fast, secure and reliable ways of sending money both within the UK and internationally.

Our "Learn More" series provides businesses with an introduction in subjects of foreign exchange and international payments.

Advantage Of Money Transfers

  • Money transfers from bank account to bank account can be conveniently made online directly from a PC or mobile device. Physical cash can be wired through a bank or money transfer operator directly into a bank account. No need to use time-consuming and manually intensive cheques.
  • Foreign exchange can be integrated with the money transfer process – no need to keep accounts in multiple currencies.
  • Funds are delivered securely to international customers, often within the same day using the Bank of England’s, real-time gross settlement (RTGS) system, CHAPS. Funds are consistently delivered to U.K. customers on the day they are sent.
  • More widely accepted internationally than credit cards, especially by smaller businesses and individuals.
  • Potential for integration with invoicing, cash flow management and accounting software.

"Real-time payments systems are gradually transforming the landscape for international payments.... at least 18 countries have already implemented national real-time or near-real-time payments systems, and many more are at various stages of planning or development."1

Money Transfers Benefit Businesses That:

  • Have suppliers, employees or contractors in foreign countries who need to be paid in local currency.
  • Want to be able to accept payments in foreign currencies to make their business more attractive to international customers.
  • Want to establish new business relationships in foreign countries without having to set up accounts with local banks.
  • Want to have full control over the timing of payments in order to manage cash flows efficiently or mitigate FX risk.
  • Need the certainty that urgent payments in sterling will settle within a few hours.
  • Want the peace of mind that comes from using a trusted intermediary for large and international payments.

"A company may deal with businesses in multiple countries, not only for supply of raw materials and parts for manufacture, but also for services such as accountancy and payroll. Some businesses also need to send money to subsidiaries and partners in other countries, or remit profits back to parent companies in other countries."2

Points To Consider

  • Although money transfer operators can handle currency conversion, there may be no opportunity to lock in FX rates ahead of payment, so there may be unforeseen FX gains or losses.
  • Money transfers can incur fees for both the sender and the recipient.
  • International money transfers can arrive several days after they have been notified to the recipient. The exact period depends on the country and the receiving bank’s terms of business.

"Whatever FX risk management strategy you use, if you are maintaining long-term trading relationships in foreign jurisdictions your FX exposures will require continual monitoring. Foreign exchange rates are influenced by the political, economic and financial fortunes of the markets they operate in."3

The Author

With 17 years experience in the financial industry, Frances is a highly regarded writer and speaker on banking, finance and economics. She writes regularly for the Financial Times, Forbes and a range of financial industry publications. Her writing has featured in The Economist, the New York Times and the Wall Street Journal. She is a frequent commentator on TV, radio and online news media including the BBC and RT TV.

Sources

1. "The Road to Real-Time B2B Payments for International Payments", American Express FXIP Blog;
2. "How Tech Innovation in International Money Transfers is Improving Business Efficiency", American Express FXIP Blog;
3. "Why Do You Need A Risk Management Strategy?", American Express FXIP Blog;

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