Sending Money from the UK to the USA: What Your Bank Isn't Telling You
- The Blog Team
- Jun 3
- 2 min read
The dollar has been the world's reserve currency since Bretton Woods in 1944. Your bank has been charging you handsomely for the privilege of accessing it ever since.
If you need to send money from the UK to the USA regularly whether you're a business paying US invoices or an individual with dollar commitments across the Atlantic, the cost of getting sterling into dollars is rarely what it appears. Your bank will show you an exchange rate.
What it won't show you is the spread built into that rate, the SWIFT fee, the correspondent bank charge somewhere in the middle of the chain, and the receiving bank's own handling fee at the other end. By the time your dollars land, the all-in cost is considerably higher than the rate you saw when you clicked confirm.
The headline rate matters. GBPUSD is trading around 1.34 today. A year ago it touched 1.38. Eight months before that it was at 1.31. On a $200,000 payment, the difference between those two extremes is roughly £11,000 in sterling cost. That's not a rounding error.
There's also the routing number problem. The US banking system runs on ABA routing numbers, a nine-digit code that tells the network exactly where a payment needs to go. Get it wrong by a digit and your transfer stalls. UK banks sending dollar payments frequently use correspondent banking chains that add both time and cost to the process. A specialist broker with direct dollar clearing relationships typically gets money there faster and at a better rate.
For businesses with regular dollar outgoings, the more important question isn't the rate on any single transaction. It's whether you have a strategy for the next twelve months of dollar payments. A forward contract lets you fix today's rate on payments you know are coming. If GBPUSD moves against you between now and when those invoices fall due, you're protected.
The US is the UK's largest single trading partner. The banks have never needed to be competitive on price, because most people assume they have no other option when they need to send money from the UK to the USA.
Gareth Bowles, Director,
Pathfinder FX
+44 (0)1743 290955
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