Barakah Money Transfer is one option available if you want to send money overseas. Others include banks, and foreign exchange (FX) brokers. Find out more about Barakah Money Transfer and whether they are the right choice for you.
What to know about Barakah Money Transfer?
Barakah Money Transfer is a registered company in the UK. The company offers great rates on money tranfers with the help of modern technology available to all their clients.
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How do you exchange your money?
If you are intending to send money overseas, these are some factors you need to consider:
- the total value of the money
- what the cost will be for sending the money
- the frequency of the payments
- how does the recipient want to receive the payment?
- how urgent is the payment?
These are some steps to follow to ensure you get the best deal:
Step 1 – Consider all the options
These are the three main methods for sending your money
- use your bank or building society
- try foreign exchange (FX) brokers (like Barakah Money Transfer)
- use high street transfer firms (such as Western Union).
If you are looking to send regular payments, the bank or building society may be the safest choice.
If you are sending large payments (such as over £3,000), you may want to consider FX brokers.
Although money transfer firms are quicker than other options, they are expensive if you are sending smaller amounts.
Step 2 – Find out the cost
The fees and exchange rates offered by Barakah Money Transfer can make it all a bit confusing to understand the total cost.
The best thing to do is work out the foreign currency you can get for your pounds, after taking all costs into account. You can use this figure to compare with other options.
The costs can be broken down into these 3 parts:
- Foreign exchange rates – the rates can fluctuate throughout the day, so make sure you keep an eye on these.
- Sending fees – the cost for transferring the money
- Receiving fees – the receiver of the money may need to pay charges. You have the option to cover these.
It is worth bearing in mind that the fees may be different, depending on how much you are sending. You may get better exchange rates for higher amounts.
The best thing to do is to get a quote from your bank and compare it with the other options, get quotes from FX brokers sites like FX Compared.
Step 3 – Get confirmation of details
Make sure the company you are planning to use will be able to deal with the amount you are sending, and within the expected timeframe.
It is a good idea to get this confirmation in writing by email or post.
Keep any paperwork you are sent, incase you need it in the future.
Is it safe to transfer money overseas with Barakah Money Transfer?
Any money which is kept in a UK savings account is covered by the Financial Services Compensation Scheme (FSCS), which gives you protection if a firm goes out of business. You don’t have such protection with foreign exchange money transfer firms. If the firm goes bust, you won’t have protection.
That being said, Money transfer firms or FX brokers including Barakah Money Transfer are Financial Conduct Authority (FCA) authorised, which means they do have to follow certain rules to help keep your money safe.
You should use a FCA authorised firm if you are sending high values of money.
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Information correct as of 14/06/21 (Google Reviews)
Is your bank or building society the best option?
You can send money safely overseas via your bank or building society.
- Easy set up– you can set up a transfer easily through your bank or building society, and they will usually help you with the process. You can even do this via your mobile.
- Convenience – you already have an account, so it is a convenient way to make the transaction.
- Security – your money is protected via a bank or building society.
- Low exchange rates – you may get better exchange rates from a foreign exchange broker.
- Slower– it can take up to 4-6 business days for a transfer. Not ideal if you need to transfer money quickly.
Making regular payments
There are many UK banks who also have branches overseas or have arrangements with other banks. This means you can get competitive exchange rates, especially if you are sending regular payments.
In order to get the reduced fees, you will need to have an account in your name in both countries. For example, you may be sending money to pay bills on a holiday home.
How to make payments via bank
If you wish to make overseas payments via your bank, this is what you will need:
- The International Bank Account Number (IBAN) and Bank Identifier Code (BIC) of the account you are paying into.
- IBAN and BIC for your own account. You may not need this if it is the same bank, in a different country.
How to use an online or high street money transfer firm
It is not difficult to find an online or high street firm to make your transfers.
Western Union and several others, have high street branches, and MoneyGram is available in Post Office branches. Online services are also common.
These are some advantages and disadvantages of using online or high street transfer firms.
- Various services – there is the option of instant cash for your recipient, or transferring into an account.
- Easy set-up – you don’t usually need an account. For smaller amounts, you might not even need identification.
- Quick Process – you can usually complete the process in minutes.
- Wide range of fees– the fees can be different, depending on the service you use, and these can sometimes be very expensive. You may pay as much as £10 to transfer £50, so get this upfront first.
- Variable exchange rates – compare costs on the day, as exchange rates can be extremely variable.
- Less protection – You don’t have the same protection with high street firms as you do with a bank.
What to expect with a high street money transfer service
If you haven’t used a high street money service before, these are some things you should know:
- A money transfer service can be done via a high street agent, newsagents or Post Office.
- You usually don’t need to open an account, it’s as simple as giving the money and paying associated fees.
- Keep the reference number, and give this to the recipient so they can pick the money up.
Do not hand over cash until you’ve done these things:
- Make sure you know the fees being charged, so you don’t get any unexpected surprises!
- Find out where the recipent is collecting the cash from. They may be able to use systems, such as M-PESA).
Key points about an online money transfer service
How it works:
- The transfer can take a few days, so it’s best for non-urgent payments.
- International money transfers can be used via online services for a fee.
- You need to register your card details.
If you are sending money overseas:
- Make sure you know what the recipient needs to be able to collect the cash.
- Use a difficult password so that your account is protected.
Should you use a foreign exchange broker?
This is what you need to know about using a foreign exchange (FX) currency broker.
- Reduced Fees – if you transfer over £3,000, FX brokers do not charge you fees.
- Better Exchange Rate – currency transaction is the specialty of FX brokers, which means you can often benefit from better rates.
- Quick Transaction – the money can be transferred within minutes in many cases.
- Ideal for regular payments– some FX brokers can assist you if you want to make regular payments.
- Longer time to open account – it may take longer to open an account with FX broker, so you may need to wait a couple of days before you do the transaction.
- Not for small payments – You may want to think twice about using FX brokers, if you are sending smaller amounts.
- Less safety – It’s not as safe and secure, as The Financial Services Compensation Scheme (FSCS) will not cover these firms.
How to find the best deal
It is always a good idea to shop around when looking for the best deal, and these are some things to consider.
- More than one comparison site – price comparison sites tend to have different offers, so widen your search and don’t just use one.
- Fits your needs – don’t just look at the price, make sure the deal offers what you need, including the timescale and value of the transfer.
- Protection – find out what protection you have with the deal you are planning to use, and that the company is safe to use.
Transfer scams happen!
It may seem like a ridiculous concept, but transfer scams happen as much as many others, so have your wits about you when you are looking at deals.
This is not to say that Barakah Money Transfer is a scam, but be aware that this can happen.
There are a number of ways through which you can identify a money transfer scam that’s about to happen. Here’s how:
- You’re contacted out of the blue and told something that just seems too good to be true. For example, you’ve won an all-expenses-paid trip to somewhere but you have to make a small money transfer first in order to legitimise yourself
- A stranger contacts you unexpectedly via email or social media and asks you to transfer him some money in order for you to win prizes (or something similar)
- You’ve been contacted by a company that does not seem legitimate. For example, if the company has no postal address
- If you’re being asked to transfer the money quickly
- You’re asked to give away extremely personal credentials such as passwords or PINs
- You’re asked to click a URL in order to “update” or “verify” your winnings/account details/order.
It’s important for you to always keep in mind that your bank or other official financial institution will never:
- Contact you and ask you for sensitive information such as your online banking account password or your PIN. Please note that they won’t ask for this even by you tapping it onto your phone’s keypad
- Ask you to update your account details by clicking on a URL in a text message
- Request you to transfer money onto a new account because your existing account has been “compromised”
It’s important for you to note that if you’re being scammed in this way, it’s not because Barakah Money Transfer is a fraudulent company that is scamming you. Rather, a third party is trying to coerce you into using the service in a fraudulent way.
How to avoid being scammed:
- Check the validity of the deal. If it looks too generous, it’s probably a scam!
- Don’t click on any links, unless you know for sure you are dealing with a legitimate company.
- Don’t give bank details or any other personal information out, unless you have confirmed the validity of the company.
Planning for future needs
It is a good idea to plan ahead and consider your future needs when it comes to money transfer.
If you plan to send regularly or large sums, you may want to consider a ‘forward contract’ which is where you lock the exchange rate for future trade.Forwards are useful if you know you’ll need a large sum of cash at some point in the future.
For example, if you think you will be sending a large sum of money and you are worried about the pound weakening, you may want to lock in the rate.
Can things go wrong with Barakah Money Transfer?
Things can always go wrong, so just make sure you keep receipts!
As discussed, you don’t have as much safety with money transfer forms and FX brokers, as they are not covered by the compensation scheme.
If Barakah Money Transfer is ‘registered’ with the FCA, they do not have a responsibility to safeguard your money. However, they do if they are authorised by the FCA. They need to ensure your funds are separate from company funds.
If you want to check Barakah Money Transfer FCA authorisation, you can do this via the Financial Conduct Authority website, which opens in new window.
When searching for other small firms, including money transfers agencies such as Western Union, it’s a good idea to find the postcode so you can narrow your search.
What are the alternatives?
If you are doing online shopping, you can use a credit or debit card as an alternative to money transfers.
If possible, avoid foreign bank drafts, as these are less safe and they are also much slower.