Cheapest way to accept small amounts of sterling outside the uk

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serotoninsid

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Can someone in the uk make an IBAN payment for a small amount of sterling into an Irish or European a/c. What's the most cost effective way to do this if the amounts are small (but re-occurring)?

Can Sterling Bank Drafts be cashed abroad - and what sort of fees are there on these generally?
 
Apart from the obvious (Paypal, Moneybookers) which are a bit messy as they require both parties to have an account, I suggest you look at Transferwise.com

I'm very pleased with them. The transaction costs £/€1 and you get a good exchange rate.

They don't seem to have a mechanism for automatic monthly payments though.

Conventional IBAN transfers between £ and € (and vice versa) carry a significant transaction fee and poor FX rates (unless the sums involved are large) IMO.
 
Yes, as part of the EU British banks must provide IBAN services. However from what I have heard, unless the customer actually asks for it, they don't offer it by default. They prefer to let the custom use more expensive means.....

Jim.
 
Mystic Oil said:
Apart from the obvious (Paypal, Moneybookers) which are a bit messy as they require both parties to have an account, I suggest you look at Transferwise.com

I'm very pleased with them. The transaction costs £/€1 and you get a good exchange rate.

They don't seem to have a mechanism for automatic monthly payments though.

Conventional IBAN transfers between £ and € (and vice versa) carry a significant transaction fee and poor FX rates (unless the sums involved are large) IMO.
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Thats perfect - thanks mystic.

Jim2007 said:
Yes, as part of the EU British banks must provide IBAN services. However from what I have heard, unless the customer actually asks for it, they don't offer it by default. They prefer to let the custom use more expensive means.....Jim.
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That's interesting. I've trawled uk bank websites and any mention of electronic transfer seems to suggest a minimum £20 fee - regardless of the amount of the transaction..
 
SoylentGreen said:
If I do an IBAN transfer and do not specify "same day" delivery my Ulster Bank charge me arount 75p.
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Can IBAN transfers only be done in-branch - or is it possible with online banking or telephone banking in the case of each of the respective banks?
 
If the person abroad has a cheque book then I imagine this is the cheapest way. When lodged to your a/c here it will have the currency conversion but apart from that just your normal transaction fee (if you pay fees)
All wire transfers with banks when they are going to a different currency ie. Stg to Euro will have a charge both sides approx €15 at a minimum.

I see no reason why transfer couldn't be done online, depending on the English bank. There will still probably be a charge seeing as it's not Euro to Euro.
 
serotoninsid said:
Thats perfect - thanks mystic.

That's interesting. I've trawled uk bank websites and any mention of electronic transfer seems to suggest a minimum £20 fee - regardless of the amount of the transaction..
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Yes, I've got many friends in the UK that have said the same. It is only when they made an issue out of that they were shown how to do it :D

Jim
 
Perplexed said:
If the person abroad has a cheque book then I imagine this is the cheapest way.
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If someone has a cheque book account in Belgium, the cheques they write can only be used in Belgium, and the checks they deposit must be Belgian cheques.

Some banks are capable of depositing international cheques, but the fee is generally €90 (even if the cheque is only worth 5 GBP).

So the bankers draft is not a practical option for the OP, unless his non-UK business can exclude countries like belgium.
 
Jim2007 said:
Yes, I've got many friends in the UK that have said the same. It is only when they made an issue out of that they were shown how to do it :D

Jim
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The friend of mine who I was trying to find this info out for is running into a spot of bother. Transferwise was working perfectly. However, it seems that they don't permit use of their service for business purposes.

With that in mind, he has advised clients to go to the banks in the UK and insist on IBAN transfer. However, they are getting grief on this - and despite insisting on this method, the banks are trying to charge them £10-20 to transfer.

Is there any document out there on the www - that sets out their legal obligation to provide a simple IBAN transfer ie. the one that should cost a few pence??
 
I can't help you directly with a pointer to legislation or EU directive on this topic. Maybe your friend should consider setting up a Euro account with someone like HSBC.

This from their website:

The EU has introduced regulations to align charges for local and cross-border payments within the region. This means that when receiving cross-border euro-denominated payments for EUR50,000 or less, quoting the correct IBAN and BIC, the beneficiary will not incur charges, over and above those payable locally, from the receiving bank.
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https://www.business.hsbc.co.uk/1/2/international-business/iban-bic

An SEPA transfer with my bank (Ulster Bank) costs 51 cent.

I wasn't aware that Transferwise won't entertain commercial transactions.
 
Mystic Oil said:
I can't help you directly with a pointer to legislation or EU directive on this topic.
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I have checked this out a little further. Apparently, an EU directive on SEPA was transposed into national law by all member states in 2009 - which includes the UK. However, one of my buddy's clients contacted a UK High Street bank - and the moment he mentioned SEPA - his attitude turned to downright rude - he said that Lloyds would not honour a SEPA transfer.

This is very infuriating. I guess what I'd really like to achieve is some piece of paperwork in black/white that can be handed to them and in no uncertain terms - show them what they're obligations are.

If anyone has any further info on this, I would really appreciate this.

Mystic Oil said:
I wasn't aware that Transferwise won't entertain commercial transactions.
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Nor was my buddy, until he went back and checked their terms and conditions....
 
Just after finding [broken link removed] - which seems to suggest that SEPA applies to sterling to sterling SEPA credit transfers also??

Does that sound right?
 
If I'm reading this situation correctly, your friend needs to tackle this differently. The issue is the cost of converting small amounts of £ to € - and that is the raison d'être for services such as Transferwise.

From their FAQ:

The TransferWise story goes back a few years. A group of friends, all young professionals in London, were facing the very same problem. Some of us were paid in euro, some in sterling. Some were paying rent in the UK, others had property to look after in mainland Europe.

Being good at maths and knowledgeable in finance, it was evident that we were being ripped off in broad daylight by Barclays, HSBC and their continental peers. As big fans of DIY we set up a small informal club of people who could trust each other with sizable amounts of money. Every month Tony paid Jean’s rent of £920 to the estate agent and Jean transferred the equivalent amount in EUR to Tony’s account in Spain at the Bank of England day rate. Tony’s girlfriend lives in Spain and Jean’s EUR where put to good use towards her rent and his trips over. Totally fair and everyone wins.
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I can think of two possible solutions:

Your friend sets up a £ denominated bank account to accept the regular payments, then manually transfers the aggregated payments to € on a regular (monthly?) basis. There are alternatives to Transferwise (oanda.com for example) who may be less shy of dealing with business customers.

Accept payment by PayPal, Moneybookers or similar - but their FX rates and charges are not very attractive.
 
Mystic Oil said:
Your friend sets up a £ denominated bank account to accept the regular payments, then manually transfers the aggregated payments to € on a regular (monthly?) basis.
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Sure - he has an account that will accept 3 currencies including sterling in another eurozone country.

I guess he could try and open a UK bank account but would he not need to be a resident of the UK for this?
 
http://www.ulsterbank.com/roi/business/products/international-banking/foreign-currency-accounts.ashx

Ulster Bank offer foreign currency accounts

  • Available in all major currencies to support your business banking needs
  • Statements are provided for all accounts
  • Bankline can be used to electronically access balance and transaction information, and to initiate payments
  • International payment facilities available in all major currencies
  • SEPA Direct Debits can be set up
  • Overdraft facilities available in all major currencies, subject to prior agreement
  • Sterling chequebooks are available for holders of Sterling Hold Accounts
  • Paying in books are available for use on all currencies
  • Only cheques issued in the currency of the account will be accepted for lodgment to the account
  • Available only for existing Ulster Bank customers who maintain a branch account
  • Fees and charges apply. Please see [broken link removed] (PDF, 93Kb), also available at branch or business centre for details
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