If you want to send money overseas, there are various options available to you, including Opal Transfer. Read on to find out more about whether this is the right option for you.

Who are Opal Transfer?

Opal offers money transfers that can be done online, by using their mobile app, by phoning the call centre, or by visiting a branch. Transfers can be done online and money can be seen from the UK to a variety of countries around the world. Opal is licensed and regulated in the UK.

Factors to consider when exchanging your money

There are various factors to take into account when choosing which option to use for your money exchange purposes.

  • the value of what you are sending
  • the total cost of sending it, including fees.
  • the frequency of the payments – i.e. is it a one off or do you plan to send regular payments.
  • which way does the recipient want to receive the payment?
  • is it urgent?

These are some steps to take in your quest to find the most suitable money exchange option.

Step 1 – What are the options?

You can send your money in three main ways:

  • through your bank or building society
  • foreign exchange (FX) brokers – including Opal Transfer
  • high street transfer firms – Western Union are one such option

Banks and building societies are the safest option if that is your main concern.

FX brokers are ideal for sending large sums of money, usually over £3,000.

Money transfer firms are probably the quickest, so ideal for urgent transfers, but they may have higher fees for smaller amounts.

Step 2 – What is the total cost?

Of course, the cost is one of the main concerns, and you should find the option that best suits your budget.

Find out what amount you will get back from your pounds in the currency you are looking to exchange.

Costs are divided into three parts:

  • Foreign exchange rates – these can fluctuate, even on a daily basis.
  • Sending fees – there will be fees from the provider for sending the money.
  • Receiving fees – there may be a charge for the receiver (although you can cover this.)

You can often get better rates if you are sending high values of money, and/or you are sending money frequently.

You can get quotes to find the best option to suit you, via brokers sites like FX Compared.

Step 3 – Confirm all the details

It is important to not just confirm the details, but also get confirmation, as you may need this in the future.

This may include: the frequency you requested the payment to be sent, the value, the fees and the expected turnaround.

Keep all your paperwork in check, just incase you need to refer to it in the future.

How can I guarantee safety with Opal Transfer?

If you use a bank to transfer money, you are protected by the Financial Services Compensation Scheme (FSCS). If you choose to use foreign exchange money transfer firms, there is no such guarantee that your money will be safe. You don’t have the benefit of a compensation scheme if the transfer firm ends up out of business.

However, these money transfer firms or FX brokers like Opal Transfer are authorised by the Financial Conduct Authority (FCA) so they do need to follow certain regulations and restrictions.

Read our page on checking the authorisation of a firm and what to do if something goes wrong.

It is a good idea to make sure you are using an FCA authorised firm.

Is a bank or building society a wise choice?

One of the main positives of a bank or building society is that your transfer will be safe and secure, but, of course, there are pros and cons, and here are some of them.

Pros

  • Quick to arrange – it’s simple to arrange a transfer, and your bank will be able to help.
  • Simple Process– you know your bank, you understand how to use the online/phone services, so the process is simple.
  • Security – by far, one of the main plus points is the security it offers. In fact, you won’t get much more secure than with your bank.

Cons

  • Not the best exchange rates – you will probably get a better exchange rate with a foreign exchange broker, especially for high value transfers.
  • Can be slower – it might take longer than the other options, even as long as 6 days to do the transfer. Not ideal if the payment is urgent.

How to get reduced charges

As there are many high street UK banks who have branches elsewhere in the world, you can get reduced charges, and better exchange rates by using these.

If you are planning on sending money frequently, this can be an attractive option.

How to use your bank

  • You will need the International Bank Account Number (IBAN) and Bank Identifier Code (BIC) for the account you want to make the payments to– and these can usually be found via their online banking system.
  • You may also need your own IBAN and BIC, although it may not be necessary if you are sending to the same bank overseas.

Should you use a high street money transfer firm?

You also have the option of using a high street money transfer firm, such as MoneyGram and Western Union, and there are lots of these around, some based in post offices.

Lets look at the pros and cons of using these:

Pros

  • Several options – you have the options of instant cash and transfer straight into the recipients account.
  • Simple process – you may not need an account, especially for smaller amounts.
  • Quick and easy– unlike the bank, the recipient can usually receive the money within days or even on the same day.

Cons

  • High fees – the fees can often be quite high, depending on the service you choose.
  • Variable exchange rates – the exchange rates can change even from day to day.
  • Less secure– as the Financial Services Compensation Scheme (FSCS) does not cover high street firms, it is not as secure as using the bank.

How to use a high street money transfer service

What you need to know:

  • money transfer services can usually be found in newsagents or you can find them at the Post Office.
  • you might not need to open an account to do the transfer.
  • you will get a reference number to give to the recipient.

Don’t hand over the cash until:

  • You know the fees – it may be urgent, but make sure you know the fees first.
  • Make sure the recipient is able to pick up the money easily.

What you need to know about an online money transfer service

What are the options:

  • They are best for non-urgent payments
  • International payments may incur a fee
  • You need to register your details, including email, phone number.

Check these before sending money overseas:

  • What does the recipient need to be able to receive the transfer?
  • Keep they money safe by choosing a password protection.

Foreign exchange broker – what you need to know

If you are planning to send large sums of money, a foreign exchange (FX) currency broker may be your best bet. Here are some pros and cons of using a foreign exchange broker.

Pros

  • Lower fees for high value – if you are sending large sums, such as over £3,000 FX brokers will often not charge any fees.
  • Better exchange rate – Currency transactions are their specialty, so FX brokers will usually give you a better exchange rate.
  • Quick payments – You can usually get the payment sent within a day or two.
  • Regular tranfers – FX brokers can deal with regular transfers.

Cons

  • Account opening can be slower – it may take a day or two to open an account with the FX broker.
  • Not great for small amounts – FX brokers are not the best option if you are looking to send smaller amounts.
  • Less safety– It is not as safe an option as a bank, as The Financial Services Compensation Scheme (FSCS) will not provide cover, should the broker go bust.

Finding deals through comparison sites

It is always a good idea to use price comparison sites to find the best option for your money transfer, and these are some things to consider:

  • Use more than one price comparison site to widen your options.
  • Choose the option that meets with your needs, including the amount of money you are looking to send, the frequency, and the speed of the payment.

What you need to know about transfer scams

When transferring money, you need to be aware that there are scammers about, so it pays to be vigilant.

These are some points to consider:

  • If the deal looks too good, it probably is!
  • Do not click on any links unless you know the company sending them is legitimate.
  • Do not give out personal details to anyone, unless you know they are legitimate.

Forward contract

If you are going to be sending money regularly in the future, you might want to consider a ‘forward contract’, which allows you to lock in the exchange rate. These are ideal if you have a holiday home you’ll be making payments on, or if you’ll be making regular payments to a family member.

What if Opal Transfer go bust?

You should check whether Opal Transfer are authorised with the FCA. If they are, they need to safeguard your money. If not, they don’t have a responsibility to do this.

You can check Opal Transfer FCA authorisation via the Financial Conduct Authority website.

Whether you choose Opal Transfer or any other options, you should ensure you keep all your paperwork and receipts.

What alternatives are there to Opal Transfer

A convenient alternative to Opal Transfer is to use a credit or debit card is a convenient alternative to money transfers. You should not use a cheque to send money overseas, as these can ending up being extremely expensive.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
×
×Find your best debt solution SEE IF YOU’RE ELIGIBLE