Are you consider using Remitly to do a money transfer? Would you like to find out about the other options available to you for money transfer? This article will look at the pros and cons of using Remitly, as well as the various other options you might want to consider.

Who are Remitly Money Transfer?

Remitly allows customers to send money to and from various countries in the world. The company has been used by more than 1 million customers around the world and they offer a free transfer to first-time customers. Transfers can easily be done online with either an express or an economy option.

How do you send money overseas?

You might need to send money overseas for various reasons. It may be that you have a child who lives abroad and they have ran out of money and need an urgent payment, or you might have family living overseas and you may want to send regular payments.

The process for sending money overseas can be quick and easy, depending on the method in which you do it. The problem is that because there are various options available, it can be difficult to determine which is the right one for you.

You can send money via transfer firms like Remitly, or you have the other options of sending it via your bank or building society or foreign exchange brokers.

The most efficient and cost effective way to send money will depend on your circumstances and what your main objectives are. It will depend whether you want to send the money quickly, how much you are looking to send and how it will be received at the other end. It is a minefield and this is why we have created a guide for you to get a better understanding of the pros and cons of each option, so you can make the right decision.

This is our guide to doing a money transfer overseas.

The 3 Main Options

There are three main possibilities for sending money overseas. There is the option of using your own bank or building society, a foreign exchange broker, and there is also the option of using a high street transfer firm.

There are pros and cons of each option, which will be discussed throughout this article. The main considerations are how quickly the money will arrive. Some options are slower than others. You also want to ensure that they can send the volume of money you want, and lastly, the cost, including fees and charges.

High street banks are, by far, the safest option and the easiest if you are looking to set up regular payments. You already know your bank and how they work, so there’s no confusing when it comes to setting up the payments.

Remitly and the hidden costs

If you choose to use Remitly, you should be aware of the fees and interest you could be charged, as well as the exchange rates. These can make it confusing to know if you are getting a good deal or not.

The best way to start is by finding out how much currency you can get for your pounds, and then you can compare it to the other offers, and get a good base figure for what you can expect to be charged.

When you have the initial sum, you can then look at the additional fees, and other add-ons to get a complete figure.

The exchange rates for Remitly are wide ranging, and as they change all the time, it is a good idea to check them regularly, and snap up a good deal when you see it.

If you are comparing deals, it is best to look within 24 hours, as the offer can quickly change, and may not be the same even the following day.

There are also sending fees to consider when you use Remitly, and there could also be receiving fees, so be aware of these before you sign up to any deal.

The receiving fees can catch you out! If you are unaware of these and you have someone waiting at the other end to pick up the money, they not realise they need to pay. However, if you know, you can arrange to cover the cost instead.

Confirmation is key!

When you have made a decision on the best option to suit your needs, the next step of the process is to get confirmation of the transaction.

This involves confirming the details with the bank, broker, or the exchange firm, and advising them to use your personal details for the transaction.

You will have specific needs for the amount you are looking to send, the timeframe for sending it – either urgently or if you can wait longer, and a destination. It is important that you have this confirmation.

It is best to get the confirmation in email or post, as this way you have the paperwork to support the order.

If you have the paperwork and receipts, it means that you will have something to support the transaction, incase anything goes wrong. You may need to provide details at some stage, including the amount and destination, so it is good to have a back up.

Is Remitly It Safe?

When you send money via your bank account, you have the assurance that your money will be safe, as it is protected by the Financial Services Compensation Scheme (FSCS), which means that in the unlikely chance that the bank goes bust, you will get your money back.

This security does not exist when you use foreign exchange firms like Remitly. If they go bust, your money will go with them! If security is your main concern, Remitly might not be the most favourable option.

There is some protection which exists though. The Financial Conduct Authority (FCA) offers some protection by ensuring that companies maintain a high level of quality. If they have this authorisation, it is most likely that you will have better security, than if they don’t.

The best tip is to use a foreign exchange firm which has FCA approved like Remitly. This is particularly important if you plan to send a lot of money.

Can you use your current account instead of Remitly?

If you already have a bank account or building society, you might be wondering if you can use this as an alternative to Remitly.

You can speak to your bank or building society about the options they have for sending money overseas, and they will take you through the process.

It is much safer to use your bank account for money exchange, than it is with the other options, and of course, there is the additional benefit of knowing where you stand with your bank, especially if you are sending money overseas for the first time.

The advantages of using your bank include an easy set up, and you can get guidance as you go through the process. It is also easily accessible, and you can guarantee it is safe and secure. Your money will be protected if you transfer money overseas using your bank account.

The issue with using your bank is that you don’t get the best exchange rate as you would with the other options, and the transfer is usually a lot slower.

In some cases, it can take as long as 6 working days for the transfer to be fully complete. Exchange firms specialise in this, so they are a lot quicker.

Making Regular Payments with your Bank

Although it can be a slow transfer when you send money via your bank, you can usually pay a fee to ensure the process is a bit quicker. This can either be a transfer or receiver fee.

Many UK banks also have branches overseas, which can allow you to make special arrangements. For instance, you might be able to benefit from lower exchange rates and smaller charges.

If you want to benefit from these special arrangements with your bank. you can just speak to them with your expectations.

If you intend to send money regularly overseas, this can be extremely useful.

You may be paying for a home overseas, or you might have family you want to send money to, and in these cases, you will probably want to make regular payments, and in this case, special arrangements with your bank can be highly effective.

The best tip here is to ensure your name is on the UK account and the account in the country you are sending money to. In this case, you will be able to benefit from lower costs and reduced fees.

Using High Street Firms as a Remitly Alternative

You can also choose to use a high street foreign exchange firm instead of using your bank.

With high street branches everywhere, it can be easy to use this option, which has the additional benefit of being able to speak to someone in-person. You can also look online for deals if you prefer.

Advantages of high street firms are that you gain access to a wide range of services including being able to do instant transfers straight into the bank account of the recipient.

It is easy to set this up, as you will not be required to set up a high street foreign exchange account, and provided the amount you are sending is relatively small, you probably won’t need ID either.

When you use these firms, you can expect the transfer to be completed quickly, which is great if you have someone at the other end who is desperate for the funds.

The fees and costs for using high street firms varies, and in some cases, you may be charged higher fees if you are sending small amounts of money. If you are sending high volumes, you usually benefit from lower fees.

The exchange rate can also fluctuate. You may see a great deal one day, and the next day it has disappeared. The key is to book quickly, as otherwise you may miss out on a great deal.

Another disadvantage is that the transaction may not be as safe, as the firm might not be covered by the FSCS. This is something worth checking before you proceed.

Should you use Remitly?

Another option is using a broker such as Remitly for your overseas transfers. This is a great option if you plan to send large sums of money overseas, as you may be able to benefit from lower fees.

As Brokers are specialists within foreign exchange, you will usually have the additional benefit of better rates, especially when sending regular payments.

It is a quick process, as the Broker will send the money to the recipient within a day, sometimes the transaction will be fully completed on the same day.

There are, of course, disadvantages in using this option, as there are with the others. It can take time to complete the set up, up to two days to get everything official.

You may only want to consider this if you are sending large amounts of money,as if you send smaller payments, there are bigger fees attached to it. Setting up an account for this purpose, may not end up being worth it.

Using a Broker is not as safe as doing the transfer via your bank. If the firm goes bust, your money may not be protected, if the firm is not covered by the FSCS.

Compare the Market

You should never take a financial decision lightly, and this also goes for choosing a company to undertake your money transfer. It is a good idea to compare the market, to find the best deal.

Why use one price comparison site, when there are so many choices out there, and the more comparison sites you use, the more likely you are to get a great offer.

The key to finding the best deal is to ensure you make the search as detailed as possible, including making use of filers to find exactly what you are looking for.

When you find a deal which suits your needs, you can then check it against what other bank, brokers and firms are charging. It is important that you ensure the deal is covered by the FCA.

You should also be aware of scams, as these do exist within foreign exchange, just as they do with other industries. There are some key things to look for to ensure the deal is not a scam.

  • If the deal is very different to the others, and seems a bit too good to be true, it is worth checking the authenticity of the firm involved.
  • The firm you are dealing with are asking you to click on links, or they are asked for personal details before you have even agreed to anything.
  • The email address doesn’t look legitimate, this is normal for scams. If the email address doesn’t match the company name, it is probably a scam.

Most firms would not do business this way, they will not ask for personal details without an agreement being reached, and they won’t usually ask you to click on links.

Always ensure you make an arrangement with an authorised provider, do not give your details to firms that are not legitimate.

If you wish to use an alternative to these, you can use your credit card for making purchases and payments overseas. Doing this is safe, secure and you will be insured. It is a great alternative to the other options.

You can make payments in alternative ways, but you may want to avoid sending cheques, as not only can they end up intercepted, it also takes a lot longer for the transaction to be completed. If you want to ensure the recipient gets the money quickly, this is not the best option. You may also end up with handling charges, at both the UK side, and the foreign exchange side.

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