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If you need to send money to Sri Lanka, it’s important to seek out an efficient method for your currency exchange and transfer. This way you can keep the fees and charges low.
But with such a wide range of options available, which one should you opt for? Our guide outlines some of the different ways to send money to Sri Lanka alongside pros and cons for each. Doing your research should ensure you can get the most Sri Lankan Rupees for your pound.
What are the different options for sending money to Sri Lanka?
There are lots of different ways to get money to a recipient in Sri Lanka. Some of the options include:
- Bank transfer
- Digital currency transfer
- High street money transfer service
- PayPal
The method that’s right for you will depend on your circumstances – for example how much you want to send to Sri Lanka and how quickly you need the money to arrive. We take a look at the different options in more detail.
High street bank
Using your own banking provider to send money to Sri Lanka is likely to be convenient and secure – but it won’t usually be the cheapest option.
High street banks tend to charge high fees for foreign currency transactions and the exchange rates may not be the most competitive. In some cases, international bank transfers can also involve overseas delivery charges imposed by the recipient bank, which can add to the overall bill.
A bank transfer also may not also be that fast – it could take a number of days for the funds to be cleared and at your destination.
In addition some banks impose a maximum limit on the amount you can send internationally per day, although this is likely to be fairly high.
Some people may choose a bank transfer because the amount they want to send is lower than the minimum required by online or digital currency exchange brokers, for example.
On the flipside, if you’re sending a large amount of currency (to purchase property for example) using your bank means you will benefit from the Financial Services Compensation Scheme (FSCS). This protects the first £85,000 of your funds and is only available via FCA-regulated banks. This level of protection may not be on offer from some of the digital currency providers.
Digital money transfer
Digital and app-based money transfer services, such as those on offer from Revolut, Wise and Xe.com, will typically have lower fees and charges, and a more competitive exchange rate on the Sri Lankan Rupee, compared to a high street bank.
Many of these services have an online calculator on their website where you can see the live exchange rate you’ll be offered, and the charges, for your particular money transfer. This way you can more easily compare different providers.
Which provider will be best for you will depend on your specific transfer. While some digital currency brokers are cheapest for large transactions and in certain currencies, others may be more competitive for smaller transactions, or offer a better exchange rate for Rupee, for example.
Your chosen method of transfer, whether it is by bank transfer or a credit card payment, for example, will also make a difference to the overall cost.
Digital transfers can usually offer instant, and sometimes fee-free transfers using the ‘real’ or mid-market currency rate.
But these providers don’t usually have a UK banking licence, so your money isn’t protected under the Financial Services Compensation Scheme in the event it goes bust.
If you’re worried about the safety of your money, check what Financial Conduct Authority (FCA) authorisations a particular provider has. It can also be worth looking at its Trustpilot ratings and customer reviews.
To send money via a digital money transfer service you’ll first need to open an account with your chosen provider. You will need to provide proof of identity in the same name as your UK bank account. There could also be further checks if you’re planning to send a large amount of money to Sri Lanka.
Some companies also impose minimum and maximum limits on how much currency you can transfer per day and not all will include Sri Lankan Rupee in their range of available currencies.
High street money transfer
Services such as those from Moneygram and Western Union, for example, can be convenient for sending cash overseas, particularly if you don’t have a UK bank account. But this is unlikely to be the cheapest option.
They can often be the only solution if the recipient does not have a bank account to receive the funds, as they can simply collect the cash from a designated outlet in Sri Lanka.
Both Moneygram and Western Union have a network of physical premises and agency premises across Sri Lanka where money can be collected in person. But the fees for this type of service can be high, exchange rates are often not the most competitive, and maximum cash transfer limits can be low.
The faster you want the cash to arrive the more you’ll generally pay in fees.
PayPal (Xoom)
Another way to send money to Sri Lanka is through PayPal, using its Xoom service for overseas transactions. This is convenient if you have a PayPal account and it can be fast (some transactions are instant). You can send the money with Xoom from your PayPal account, via a bank transfer through PayPal or with a debit or credit card.
Another plus is that the recipient doesn’t need a PayPal account as you can send the money directly to a bank account, or the money can be picked up from a physical location. The cash pick-up locations include branches of Cargills Bank, Bank of Ceylon and Commercial Bank, in Sri Lanka.
But PayPal can be an expensive option for sending money abroad as the foreign conversion fees are not usually particularly competitive and exchange rates may be lower than competitors.
Also the daily maximum transfer limit is fairly low. Additional identification and proof of address is required for single transactions of more than £850 (the maximum limit is £400 for cash pick up transfers).
It is also important to note that cash held with PayPal and money transfers are not protected under the FSCS, although PayPal is regulated and authorised as an e-money institution.
Paypal has its own ‘Money-back guarantee’ scheme which promises to refund your transaction in full if the money is not received.
How much money can I send to Sri Lanka?
Some currency providers and many banks apply a maximum daily or per transaction limit on your currency transfer. So, if you need to transfer a large amount of Rupee to Sri Lanka, compare different providers to see which will best suit you, factoring in safety and security of the transaction.
If you need to transfer a large sum for a property or business purchase, for example, it may be worthwhile seeking out specialists who can facilitate large transactions at competitive exchange rates and lower fees.
Some of these providers can offer forward contracts, which can limit exchange rate risk when sending large sums of money overseas (more on this below).
There are likely to be extra checks and ID requirements if you’re planning to send a large sum, due to money laundering rules.
Similarly there can be less choice of options if you only want to send a small amount of currency — and the charges can be disproportionately high, so it makes sense to compare different providers.
Is my money safe?
While the big UK banks that are fully regulated by the Financial Conduct Authority will give customers protection under the FSCS, other currency providers can’t offer FSCS protection.
Some currency exchange companies offer their own money safety net scheme, but it may not be as generous or robust as the FSCS. It is up to individuals to decide what level of financial protection they’re comfortable with.
FCA-authorised currency providers are obliged to keep clients’ money separate from the company’s own funds – this will protect you if the firm goes bust. But if a company is just on the FCA register (and not authorised or regulated), then customers’ cash could theoretically be lost if the company went into administration.
Thoroughly check out a company’s credentials and tread with caution. Scams and fraudsters are rife in the currency transfer market.
Can I lock into an interest rate but transfer the money later?
As mentioned above it is possible to do this with what is called a forward contract.
With a forward contract you can fix or lock into a particular exchange rate making the actual currency transaction at a later date.
This can provide peace of mind and help with budgeting if you need to make a large money transfer, for example. It can also save you a lot of money if the value of the pound weakens against the baht before the transaction goes through.
There is the risk that the pound will strengthen in value though, so it is a gamble, but the forward contract can help you hedge against a worsening exchange rate.
