Transferring money to foreign bank accounts is something you might have to do for a wide range of reasons. Maybe you have friends or family abroad, or you want to receive payments from international clients.
When sending payments overseas, traditional banks can be slow, inefficient, and charge high fees and unfair exchange rates, so it’s wise to consider alternative payment providers. Both Monzo and Starling Bank offer international money transfers. Monzo is a digital bank, based out of the UK and founded in 2015. Rather than having brick and mortar branches like other banks, Monzo is app-based, letting customers handle payments and account services from a simple smartphone app. Starling Bank is another all-digital, mobile-only bank based in the UK and founded in 2014. It, too, offers international bank transfers.
It’s important to take the time to research your options when sending money overseas, to make sure you are getting the best deal for your payment. This article will introduce some key points to consider, such as fees and exchange rates, and an alternative provider, TransferWise.
A key aspect that sets Monzo apart from other banks and providers, is that they have actually partnered with TransferWise. This means that when you send money abroad with Monzo, you’re getting the same rates and experiences as you would with TransferWise, so you’re money is converted at the real exchange rate, with competitive fees.
So, when sending money with Monzo, you’ll only have to pay a minimal transfer fee of £3.95. Not only that, but you’ll be getting the latest live foreign exchange rates. These are the same foreign currency exchange rates you would find if you searched on Google or viewed live exchange tables on other websites.
TransferWise specialises in international payments, making the whole process simple and streamlined, as well as offering competitive rates and the real exchange rate.
TransferWise does things differently. Rather than altering its exchange rates to cut itself a better deal, that can result in your recipient receiving less money than you had hoped, TransferWise offers transparent pricing and the real exchange rate.
Not only that, but TransferWise also offers the multi-currency Borderless account. It lets you hold balances in more than 40 currencies, receive money from people around the world for free, and convert at the real exchange rate. It’s a great option for freelancers, small businesses or travellers who tend to send or receive payments internationally.
So how does Starling Bank compare to the likes of Monzo and TransferWise? This mobile bank, unlike many other banks and payment providers, does not adjust the exchange rate. It offers the real exchange rate, just like Monzo and TransferWise. However, Starling Bank applies transfer fees which can add up to quite a lot of money on larger payments in particular.
In terms of transfer fees, Starling Bank charges 0.4% of the total payment amount for every transfer.¹ So, for a transfer of £1,000 to EUR, for example, £4 will be taken as a transfer fee. The percentage system used by Starling Bank means that the bigger your payment, the higher the transfer fees will be, so if you need to send a large amount of money then you may end up paying very high transfer fees.
Other fees you need to be aware of with Starling Bank include the SWIFT fees and local fees, which can vary from one country to another. These fees are in addition to the 0.4% transfer fee on all international payments. So, if you want to send money to the Euro zone, for example, you'll pay the 0.4% fee, plus a £5.50 fee, plus a 30p local fee.²
Monzo doesn't offer euro accounts, as it doesn’t offer a multi-currency accounts for users. Starling Bank, meanwhile, does offer a euro account. This lets you hold, send, and receive euros for free.
However, if you need to convert to another currency, the Starling euro account charges 0.4% fees on all conversions.³ One other option for those wishing to receive and hold euros, as well as many other currencies, would be the Borderless account from TransferWise.
Those who choose to bank with Monzo can enjoy the use of their card all over the world. Ideal for frequent travellers, the Monzo card lets you spend cash anywhere you want, with a lot of great advantages.
Using your card abroad with Monzo comes with no fees whatsoever. In terms of the exchange rate, using the Monzo card abroad makes use of Mastercard's exchange rates, with no added charges or alterations. You can also withdraw up to £200 every 30 days for free, but you'll be charged 3% on withdrawals over this amount.⁴
The Starling Bank card is a contactless Mastercard. You can use the card abroad in different countries while traveling around.
Like the Monzo card, the Starling Bank card allows you to make payments all around the world without any fees. There are no fees for ATM withdrawals or transactions internationally, and Starling Bank also makes use of live Mastercard exchange rates.⁵
Overall, we can see some key similarities between Monzo and Starling bank, but also a few differences. In terms of using cards abroad, both of these mobile banks have similar features and functionality, with both making use of the same Mastercard exchange rates, allowing customers to spend freely while abroad.
In terms of international money transfers, however, there are some differences between Monzo and Starling Bank. While Monzo is powered by TransferWise for minimal transfer fees and mid-market exchange rates, Starling Bank handles its own international transfers and has fees associated with its payments.
When making an international payment, consider using TransferWise to save money, and check out their borderless account that lets you receive for free and hold 5 currencies, just like a local.
Sources checked on 12-August 2019.
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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