What is a money transfer?

United Kingdom By Liudmila Simakova Aug 26, 2022

Your concise guide to using money transfers

If you want to support loved ones, pay for services, send money as a gift, or move funds between bank accounts, you may want to make a money transfer. Here, you’ll learn everything you need about money transfers so that you can quickly and easily send money with confidence.

What are money transfers?

Money transfers are any transactions arranged to move money from one place to another. Most of us make money transfers all the time: for example, through standing orders and Direct Debits to pay bills, or simply transferring money to a friend’s account to pay our share of a restaurant bill. However, sometimes you’ll need to make a money transfer for a specific reason – perhaps to help out a loved one overseas – and then it’s worth exploring the different types of money transfer available, to work out which is best for you.

The term ‘money transfer’ can also specifically relate to a type of credit card transfer where you transfer funds from your credit card to your UK bank or building society account. The money transfer forms part of your credit card balance and is subject to repayments as part of your monthly statement. You can find out more about this from your credit card provider.

What is a money transfer normally used for?

Money transfers allow funds to be moved quickly and securely without needing to exchange cash. You can use a money transfer to send money overseas, or within the UK.

There are a few common reasons why you might find money transfers useful:

Supporting friends and family

You can use money transfers to help friends and loved ones when they need it most – maybe they need your help for urgent car repairs, or perhaps they’re on holiday and have run out of cash. You might set up a regular transfer to send money overseas to family members back home.

Sending gifts of money

Everyone has one family member who is tricky to choose a gift for. Sending money so that they can choose for themselves makes sure they get the perfect present. Money transfers are also helpful if someone is overseas, offering a practical alternative to sending a physical gift. With Western Union, you can schedule money transfers for special dates so you never forget a birthday or anniversary again.

Paying for online purchases

Money transfers are a fast and secure way to pay for goods bought online, especially if you’re buying something special from overseas. You can also use money transfers to pay for holiday accommodation when you’re booking a trip abroad.

Buying a house

Money transfers are particularly useful for sending large amounts, because they are so secure, and one of the most common uses for this is when you’re buying a property. In the UK, you’ll usually be asked to transfer 10% of the property price on the day you exchange contracts, and this is often done using a CHAPS transfer (see below).

What are the common types of money transfer?

Bank transfer

You can transfer money through your bank, and this is often easy to do using online banking or an app. Common types of bank transfer in the UK are:

Bacs

The Bacs system allows for both one-off and regular bank transfers, and you probably use Bacs payments without thinking about it – for example, Direct Debits, standing orders and many salary payments are made using Bacs. Bacs transfers can take up to three business days to clear.

CHAPS

Clearing House Automated Payment System (CHAPS) transfers allow people to send and receive large sums of money on the same business day. If you’re not a business customer, you may have to go to the bank in person to do this.

Faster Payments

If your bank is signed up to the Faster Payments system, you can use this to make almost instant transfers to other bank accounts that use the system. You would usually make this kind of transfer online or using a banking app.

Wire transfer

A wire transfer allows money to be transferred between two bank accounts without the accounts being linked – the bank acts as an intermediary. This is a good option for sending money overseas.

In person

You can transfer money in person using a specialist money transfer service like Western Union. All you need to do is visit one of our 4,700¹ agent locations in the UK. You can even send money to someone without a bank account – they can pick up money in cash at an agent location near them.

Cheque or postal order

Although their use has declined in recent years, you can still send money to another person or business using cheques issued by your bank. A similar method is to use a postal order, purchased from the Post Office. When you buy a postal order, the money leaves your account there and then, whereas a cheque clears when the receiver gives it to their bank. The disadvantage of using these to send money is that, if you are sending through the post, there is a risk of loss, damage or theft while it is in transit.

How can I make a money transfer?

There are a range of options available to you when it comes to making a money transfer. Here are some popular money transfer services you can explore:

Through a bank or building society account

You can transfer money from your bank account to another using online banking services, a banking app or by visiting a branch. You’ll need your own banking details (or login details for online banking), as well as the account name, sort code and account number of the account you’re sending money to. If you’re sending money abroad, you may need your receiver’s IBAN, or SWIFT/BIC code.

Through a specialist money transfer company

A money transfer company like Western Union can provide you with different methods of transferring money both within the UK and overseas. You can send money online or visit an agent location to make a money transfer in person. Depending on the type of transfer you choose, you will need your receiver’s details and may need government-issued ID. Whichever method you choose, you can be sure your money will reach the receiver quickly and securely.

Through a payment app

If you’d like to send money on the go, you can download the Western Union app for free and get started immediately. Send money directly to a loved one’s bank account using your debit or credit card², or transfer money for pick-up in person here or overseas.

To your receiver’s phone

If you’re making a money transfer to someone who needs instant access to funds, you may be able to send it to their phone. Depending where your recipient is and which phone operator they use, you can send money to your receiver’s mobile wallet³ so they can spend it straight away.

What are money transfer fees?

Different types of money transfer carry different fees⁴. A simple bank-to-bank Bacs or Faster Payment transfer is usually free, while sending money by wire transfer or CHAPS may incur a fee. If you’re sending money overseas you’ll also need to be aware of the exchange rate. When you send money with Western Union, it’s easy to see how much your loved one will receive right at the start of the process.

FAQs and guides

¹ Agent location count valid as of December 31 2021.
² Some card issuers may charge additional fees for using our services. Please contact your card issuer for more information.
³ Additional charges, including SMS and account cash-out fees, may be applied to the receiver’s mobile wallet account by the mobile network operator and/or wallet service provider.
⁴ Western Union also makes money from currency exchange. When choosing a money transmitter, carefully compare both transfer fees and exchange rates. Fees, foreign exchange rates and taxes may vary by brand, channel, and location based on a number of factors. Fees and rates subject to change without notice.