The United Kingdom been at the forefront of financial services for decades. Its economy – combining those of England, Scotland, Wales, and Northern Ireland – is the sixth largest in the world.
London is also the world's second-largest financial centre. With thriving domestic industries, including everything from aerospace and pharmaceuticals - the UK is an attractive place to launch, grow and expand any business.
If you're targeting global expansion for your business, it makes sense to know the financial landscape of local markets. This guide will help you understand the UK’s payment landscape and set you for future success.
Global transfers to and from the UK
Located at the centre of the world's time system, London and the UK are particularly well-positioned to work with businesses across the globe.
However, accessing this global reach is a struggle as many businesses face difficulty making international payments. Propelled by technological change, businesses are actively seeking solutions to meet the demands of the 21st century – and traditional banks aren't delivering.
Neo-banks and alternative finance providers are designing progressive banking products to help businesses grow. With a 3S Money International Business Account, you get UK account details and a sort code issued in your company name. These details enable seamless cross-border payments without the hassle of opening a UK bank account.
The official currency of the United Kingdom is the pound sterling, commonly referred to as the pound. The £ symbol designates it; its international currency code is GBP (Great British Pound).
The sterling is the world's oldest currency, continuously used since its creation. It's also the world's fourth most-traded global currency after the US dollar, the Euro, and the Japanese yen.
Consumer payment culture in the UK
As in many countries, the Covid-19 pandemic sped up the adoption of contactless payment and online banking. In 2021, 57% of all payments were made using debit or credit cards, and 32% were made with contactless cards.
The use of cash in the UK has seen a steady decline in recent decades. As a percentage of total payments, cash accounted for just 15% of transactions in 2021. UK Finance predicts that this will drop to 6% by 2031.
These trends have important implications for businesses looking to operate in the UK.
What are the different ways to send money to and from the UK?
As an international business with a presence in the UK, chances are you'll be looking to move money around the world. There are many ways you can do this:
- International money transfer specialists
- Bank-to-bank international transfers
- Online multi-currency accounts
- Cash pick-up
- Digital or mobile wallets
Which works best for you depends on your business needs and operations. Let’s look at the pros and cons of each.
International money transfer specialists
In the UK, you're spoilt for choice regarding companies that specialise in international money transfers. Moneycorp and Western Union are well-known examples.
With this method of transfer, you can choose how the money is received. This can be via bank transfer, mobile wallet, or physical cash pick-up.
If you want a faster transfer, you'll pay a premium for it. Plus, these services often add a markup on the currency exchange rate. That means the sender will have to pay significantly more - or the recipient will receive less. Either way - the provider pockets a healthy profit.
Bank-to-bank international transfers
Another option is to use your bank to transfer the funds. This is a popular choice for many businesses and individuals as it's often the most accessible and convenient. But it can also be expensive:
Banks usually charge a fee to arrange and process money transfers.
Some banks may also charge a percentage of the total amount you're transferring (as much as 3-4%).
Banks may use their own foreign exchange (FX) rates which could cost you 5-7% more.
International transfers often correspondent banks - all of which will charge a fee, increasing the total cost.
All providers are different, so check your business account's terms to see your bank's international transfer charges. If the fees are too high - consider switching to an alternative provider.
Online multi-currency accounts
An alternative to the traditional bank transfer is an online multi-currency account. These accounts are popular with businesses operating in multiple markets worldwide. They offer streamlined cross-border payments and 5x cheaper FX rates than high-street banks.
Electronic Money Institutions (EMIs) are the leading providers of online multi-currency accounts. EMIs offer many of the same financial products and services as traditional banks but operate differently.
Here are three reasons why EMIs are so attractive to growing international businesses:
EMIs offer lower fees and more competitive FX rates.
All your business transactions are visible in one easy-to-use platform.
Your business can grow quicker with greater access to multiple markets and currencies.
Some transfer providers offer the option to pick up physical cash at one of their locations near your recipient. This service is often an option provided by international transfer specialists, so the same pros and cons apply. Cash pick-up is straightforward with funds often available for same day collection.
However, there's usually a price to pay for convenience and this will be costly for regular payments.
Digital or mobile wallets
Another option for sending and receiving cross-border payments from the UK is a digital or mobile wallet. In the UK, almost a third of consumers now use digital wallets to make retail payments.
PayPal was one of the first digital wallets and is still the world's most widely used. While a popular tool for personal transactions, business transactions can be expensive. There are no set-up fees, but the standard charge is 5.4% + $0.30 per transaction. There are also hefty currency conversion charges to consider.
What’s the best way to send money to and from the UK?
Suppose you're a business sending and receiving regular international payments to and from the UK. In that case, one-off transfer services, such as those offered by traditional banks and international transfer specialists, will be expensive.
Most international businesses will complete multiple daily transactions - whether paying suppliers, employees or collecting consumer payments.
If you use transfer specialists or traditional banks for regular transactions, their high fees will increase and eat away at your bottom line.
An online multi-currency account is a better solution for businesses that want hassle-free access to global markets. With 3S Money, you can send and receive payments in 65+ currencies and 190+ countries.
How do I send money to the UK? Step-by-step
With a 3S Money International Business Account, you can send money in 65+ currencies to 190+ countries, including the UK. Here's how:
1. Open a 3S Money International Business Account
Once approved, get UK account number and sort code in your business name.
2. Enter the transfer details
Add the recipient’s name and account details, then choose the currency and country.
3. Send your money
Make the transfer from your online account and receive an alert when it’s complete.
How do I receive money from the UK? Step-by-step
A 3S Money International Business Account makes sending and receiving international payments in 65+ currencies from 190+ countries easy. Here's how:
1. Open a 3S Money International Business Account
Benefit from one easy-to-use platform for all your international payments.
2. Give customers your account details
Get a UK sort code in your business name to easily collect GBP payments.
3. Receive your money
See the payment arrive in your online account.
How long do transfers to and from the UK take?
It depends on where the transfer is being sent from, where it's going, the systems used, and when you send it.
Many financial institutions use SWIFT (Society for Worldwide Interbank Financial Telecommunications). SWIFT transfers generally process in one to five working days.
Transfers between 3S Money accounts occur in real time, and the funds will instantly appear in the receiving account.
Many financial institutions only process transactions on working days. It could take longer if you send your transfer on the weekend or public holiday. When making transfers between banks, some take longer to process incoming payments than others which can cause further delays.
How much money can I send or receive from the UK?
There's no limit to how much you can transfer. However, some providers cap the amount you can send in a single transaction. You may need to make multiple transfers if you want to transfer a large amount.
3S Money doesn't impose transaction limits. Once your International Business Account is approved, you can transfer high-value payments to 190+ countries worldwide.
Transferring large amounts
If your provider does impose a cap, watch out for multiple transfer fees. If you send payments regularly in this way the costs could mount up.When transferring large amounts, consider the following:
Some providers cap the amount you can send in a single transfer, so you may have to do several.
There may be a limit on the number of transfers you can make in any 30-day period.
Larger amounts can take longer to process.
Your provider may enquire about large transfers. This is considered best practice and an essential part of how institutions meet their obligations. Learn more about how 3S Money is regulated.
How much does it cost to transfer money to the UK?
We mentioned earlier how international transfers via traditional banks could be a costly way to send money. Let’s look in more detail at the fees you might pay:
1. Outgoing transfer fee:
You’ll most likely be charged a flat fee for sending an international transfer. This could be as much as £20-£40.3S Money charges just $1 (or your local equivalent) per transfer, regardless of how much you send. Find out more about 3S Money pricing.
2. Incoming transfer fee:
Most UK banks charge around £7.50 for receiving payments from international bank accounts. 3S Money charges £0.00.
3. Initiation fee:
Some banks might charge you a fee if you request the transfer over the phone or in person rather than online. Expect this to be around £20. 3S Money doesn’t charge initiation fees.
Banks might also charge a fee based on a percentage of your transfer amount. For UK banks, this is currently around 3-4%. 3S Money charges just $1 per transfer (or your local equivalent) regardless of how much you send.
5. Exchange rate markup:
The exchange rate you can find on Google or see on the news is called the “mid-market” rate. Transfer providers apply their own exchange rates to international transfers, which means you’ll pay more – and they keep the difference. 3S Money offers FX rates up to 5x lower than traditional banks.
We’ve covered a lot in this article, so here are some tips and main takeaways to consider:
Many international businesses choose the UK as a base of operations because of its global reach and central time location.
An online multi-currency account can be an effective solution for businesses looking to scale and easily access new markets.
With a 3S Money International Business Account, you get a UK account number and sort code in your company name.
Watch out for currency exchange markups, as they can eat into the money you're sending.
When choosing a provider for global payments, ensure an independent body regulates them.
Manage your money to help your business grow
Ready to get UK account details for your business and start making and receiving payments in new markets? Open a 3S Money International Business Account and take control of your financial future.