Why High Street Banks Are Expensive for Sending Money Abroad

Many people in the UK still use their high street bank for overseas payments because it feels familiar and secure. However, international transfers made through UK banks are often more expensive than expected. The higher cost usually comes from a combination of high fees, foreign exchange markups, and how banks process international transactions.

How high street banks send money internationally

Most UK banks send international payments using traditional banking networks rather than direct local transfers.

In many cases, overseas payments are processed through:

• The SWIFT network
• Correspondent or intermediary banks
• Overseas partner banks

Each step in this process can add extra charges and delay, which affects the total amount received.

The main reasons high street banks cost more

High street banks are structured differently from specialist providers. Their pricing reflects branch networks, legacy systems, and multiple processing layers.

Higher costs usually come from:

• Flat fees for international transfers
• Foreign exchange margins
• Intermediary and receiving bank charges
• Less transparent pricing

These costs are often spread across the transfer rather than clearly itemised.

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Fixed international transfer fees

Many banks charge a flat fee for sending money abroad, regardless of the amount of money being sent.

Typical characteristics include:

• A fixed service fee per transfer
• Additional charges for urgent payments
• Higher fees for transfers outside Europe

For small transfers, a flat fee can make costs disproportionately high.

Exchange rate margins explained

One of the biggest reasons bank transfers are expensive is the foreign exchange margin.

How banks apply foreign exchange margins

Instead of charging all costs upfront, banks often add a conversion charge to the exchange rate. This means the foreign exchange rate used is worse than market exchange rates.

Even a small margin can significantly increase costs, especially for large amounts of money.

Poor foreign exchange rates often cost more than a clearly stated service fee.

Intermediary and correspondent bank fees

International transfers sent by UK banks often pass through multiple correspondent banks before reaching the recipient’s international bank account.

Why intermediary fees apply

Each intermediary bank involved may deduct its own fee. These receiving fees or intermediary fees are usually taken from the transfer amount rather than charged upfront.

This can result in:

• The recipient receiving less than expected
• Extra charges only visible after completion

Receiving bank charges

In addition to fees charged by the sending bank, the recipient’s bank may apply its own receiving fee.

Receiving bank charges depend on:

• The destination country
• The bank’s fee structure
• The account type

These fees are rarely shown in advance and reduce the final amount received.

Limited transparency in bank pricing

High street banks often provide less transparent pricing than specialist payment providers.

Common issues include:

• Exchange rate margins not clearly separated
• Intermediary fees deducted mid-transfer
• Limited visibility of total costs before confirmation

This makes it difficult to identify hidden fees.

Are bank transfers always more expensive?

Bank transfers are not always the most expensive option, but they are often less competitive.

Banks may still be used when:

• Sending money occasionally
• Transferring smaller amounts
• Convenience is prioritised over cost

For frequent or high-value transfers, banks often charge higher fees.

How payment method affects cost at banks

The funding method used can affect pricing.

Bank account transfers

Sending funds directly from a current account via online banking avoids card processing fees. However, it does not remove foreign exchange margins or intermediary charges.

Debit card payments

Some banks allow debit card-funded international transfers. These may include:

• Card processing fees
• Foreign transaction fees
• Higher overall costs

Debit card payments are usually faster but almost always more expensive.

Why banks struggle to offer lower fees

High street banks face structural challenges that affect pricing.

These include:

• Branch networks
• Legacy systems
• Compliance overheads
• International transfers not being a core product

This makes it harder for banks to offer lower fees or competitive rates.

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Online transfers vs branch transfers

There can be cost differences depending on how the transfer is made.

Online banking transfers may:

• Be slightly cheaper
• Offer clearer pricing

Branch-based transfers often:

• Include higher service fees
• Provide less visibility over exchange rates

Are there lower-cost alternatives to high street banks?

Yes. Specialist providers focus specifically on international transfers and foreign exchange.

These payment providers often aim to:

• Reduce intermediary involvement
• Offer better exchange rates
• Provide clearer cost breakdowns

This can result in lower overall transfer costs.

Do UK high street banks offer better rates than digital-only banks?

In most cases, UK banks do not offer better rates than digital-only banks. Digital services often provide more competitive rates and clearer pricing, while high street banks typically apply wider exchange rate margins and higher international transfer fees.

Why comparing providers matters

No single provider offers the best deal for every transfer. Costs vary based on:

• Transfer amount
• Destination country
• Currency pair
• Payment method

This is why it is important to compare money transfer rates rather than relying on one bank.

Country-specific differences in bank transfer costs

Transfer costs vary depending on the destination country.

Factors include:

• Local banking systems
• Currency liquidity
• Whether intermediary banks are required

Country-specific pages such as Cheapest Way to Send Money to [COUNTRY] from the UK often provide more accurate guidance.

Regulation and consumer protection

UK banks and international transfer providers are regulated and must follow rules around transparency and safeguarding.

Regulation focuses on:

• Protecting customer funds
• Clear pricing disclosure
• Fair treatment

However, regulation does not guarantee low costs.

Common costs to watch for when using banks

Understanding these costs helps identify whether a bank transfer offers value.

Correct as of 19 December 2025

FAQs about why high street banks are expensive for sending money abroad

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