Sending money abroad is now easier than ever. In fact, HSBC alone processes some 1.3 million international transfers for customers every year.¹ However, it’s still a pretty complex business for banks to make sure all their customers’ money lands in the right place, so of course, there are costs involved.
How your money will be transferred depends to an extent on where it’s going. If you bank with HSBC UK you might see international transfers referred to as SEPA payments, international payments, Worldpay or Priority Payments.
The payment route used, as well as costs, cut off times, and the processing times vary, depending on where your money is headed. You may even be able to save using a service like Wise - but more on that later. Because the timescales - and costs - involved in moving money abroad vary depending on the circumstances, it’s a good plan to do some research in advance so there are no surprises.
Let’s take a look at a quick example before we dig deeper.
Below is a theoretical online bank transfer sending £1000 from the UK to a euro bank account in Germany.
While the prices may seem comparable at first glance, it isn’t just the stated fees you need to pay attention to.
What isn’t often mentioned is that, on average, banks and money transfer providers often mark up an exchange rate by 4-6% to make money on converting your currency. Which means it’s a good idea to compare the exchange rate you’re offered with an online currency converter to find out how much your international transfer is really costing you.
In addition, nearly all transfers sent internationally are sent via SWIFT
|Provider||Fee||Exchange Rate||Total Cost|
|HSBC (UK)||£4¹||HSBC exchange rate + markup||£4 + exchange rate markup + likely fees from both intermediary and recipient banks|
|Wise||£3.75²||The real exchange rate - the same one you find on Google||£3.75|
Now that you know a bit more about what an international transfer really costs, here’s all you need to know about making one with HSBC.
Before you start, it’s a good plan to understand the fees involved when making an international transfer with HSBC. However, don’t forget that there may be additional charges added by the recipient bank or any intermediary banks who handle the transaction along the way.
HSBC’s fees vary depending on the specific circumstances of the transfer, and are set out below. However, make sure to check out all the small print online before commiting.
|HSBC UK International Transfers||Regular Fees|
|Incoming international transfer|
|Outgoing international transfer|
As well as any flat fees applied, the other important thing to understand is the exchange rate that’ll be used for your transfer. HSBC’s Personal Banking Terms and Conditions document³ explains the rates used if you ask them to convert the currency before the transfer takes place:
> The HSBC Exchange Rate applies to all conversions apart from Global Transfers when the HSBC Global Transfers Exchange Rate will apply. These are variable rates that change frequently. If you ask us to make a payment immediately, we’ll provide details of the exchange rate and you’ll have the opportunity to accept or reject it before confirming you want us to send your payment. If you ask us to make a payment in the future, we’ll apply the HSBC Exchange Rate/Global Transfers Exchange Rate at the time we make the payment.
That means that, if you ask HSBC to convert currency as part of a transaction that’s being processed immediately, you can see the rate used. Just make sure to compare it to the real rate with an online currency converter, to make sure it’s fair. If you’re asking HSBC for an international transfer to be made at some point in the future, though, they’ll just apply the rate of their choosing, without showing it to you in advance.
You might also find that it's not HSBC that sets the exchange rate for your transaction. For example, if you’re transferring money abroad using a different currency than your account, an agent or correspondent bank might choose the exchange rate to apply. They might also add fees, which have to be paid by either the person sending or receiving the money.
As these intermediary banks don’t need to worry about keeping their customers happy, they generally don’t offer a great deal. They can mark up the exchange rate and keep the difference as profit, as well as charge any fees of their choosing.
|HSBC international transfer||Additional fees|
|Sending/recipient bank and/or intermediary bank(s)||HSBC’s Personal Banking guide³ explains: “For international payments, the recipient’s bank (and any other bank we use to send the payment) may also make a charge. You’ll only have to pay these charges if you choose “sender to pay all charges” when you request your payment.”|
|Priority payments arranged by visiting a branch or via Telephone Banking Service (TBS)||£30|
Because there are fees added by both the bank sending the money abroad, and the bank which receives it, you might also be asked if you want to pick up the recipient fee if you’re transferring money to someone overseas.
Similarly, if someone sending money to you selects the option to have you pay the recipient and intermediary fees, you might find you receive less than you expected. Additional fees could be a percentage or a fixed cost and can be pretty high depending on the amount being transferred, whether there are intermediaries involved, and the recipient bank’s policy.
And if HSBC sends your transaction via the SWIFT network, then there could be up to 3 intermediary banks involved, each taking their own cut of the money. As mentioned above, they might even dictate the exchange rate used in converting your money and since neither you nor your recipient are their customer, they’re not at all bothered about your happiness.
You might also find it useful - if you make international transfers regularly, and like your money to be as mobile as you are - to get a new Wise Borderless multi-currency account.
Borderless account is great for people who live or work overseas, or travel regularly, as you're able to manage and move your money around the world at the touch of a button - with no monthly fees.
It’s also a perfect solution for freelancers working across borders. If you get paid in the EU, the UK, Australia or the US, but live elsewhere, a Borderless account will let you get paid locally using virtual local bank details - cutting out international transfers entirely.
See for yourself if you can get a better deal with Wise.
If you hold one of the HSBC UK premium accounts, you can choose to move your money using what’s known as a Global Transfer. However, for this article, we’ll focus on the options available to holders of a regular HSBC UK account.
In general, it's easiest and quickest to organise your transfer online.This is also the cheapest option by far. Full details on how to make an online transfer are available on the HSBC website.
Online transactions are capped at £50,000¹ while branch-based transactions are unlimited.
If you want to send money internationally, you're going to need a few key details¹:
- The transfer amount
- The full name of the person you’re sending the money to and their address, as written on their account
- Beneficiary’s bank code
- The country you’re transferring to
- The recipient’s IBAN, or account number if you’re transferring to the US
- The recipient bank’s SWIFT/BIC code, or routing number if you’re transferring to the US
- The reason for payment and any payment reference needed
What do I need or what should I give to the sender in order to receive an international bank transfer?
You’ll need to give the sender the following¹ to receive an international money transfer with HSBC:
- Your full name and address and that of your bank
- Your IBAN
- The correct SWIFT/BIC code
- The amount being transferred - and the currency to be used. Don’t forget to take into account any charges you’re liable for.
You’ll find your IBAN on any bank statement, and you can use this helpful tool to find, or check your SWIFT/BIC code
However, it’ll take a bit longer to get money elsewhere in the world. Most international transfers would be completed within 4 days, but this depends a lot on where your money is going and any further checks required to complete the transaction³.
This is usually 3:30 pm for euro and sterling payments, and 6:00 pm for US dollar payments. Different cut-off times apply for other currencies, so it’s a good idea to check before you confirm your transaction.³
- Log in to online banking for frequently asked questions and to chat with an advisor
- Use the HSBC branch finder to get help in person
- Or give HSBC a call - 03457 404 404
Whether you’re making a one-off payment overseas - to pay for a holiday perhaps - or are a regular user of international money transfers, there are a few pitfalls and hidden fees which can lead to nasty surprises. Do your research in advance, to avoid paying too much for your transfer, and make sure you get the best deal for your situation.
All sources checked on 28 September 2020
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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