A currency broker is usually the more cost-effective option for international transfers above roughly £5,000, because brokers typically apply a tighter margin to the exchange rate than high-street banks and provide tools such as forward contracts and rate alerts. Banks remain convenient for small, occasional payments where the cost difference is minimal. This guide explains how each option actually works, what each one costs, and how your money is protected.
What is a currency broker?
A currency broker is a specialist firm that exchanges one currency for another and sends the converted funds to a bank account abroad, normally at a tighter exchange rate margin than a bank. Brokers focus on one thing — currency — so they add services banks rarely offer retail customers: a dedicated specialist who knows your situation, forward contracts and market orders, and guidance on timing a transfer around market events.
Banks treat international payments as one product among hundreds. The transfer itself is reliable, but the exchange rate applied is usually set automatically, with a margin built in that most customers never see itemised.
Currency broker vs bank: the key differences
| Currency broker | High-street bank | |
|---|---|---|
| Exchange rate margin | Typically tighter, often well under 1% on larger sums | Often in the region of 2–4% for retail customers |
| Transfer fees | Usually none on larger transfers | Frequently £15–£30 per SWIFT payment, plus possible intermediary fees |
| Service | Dedicated specialist by phone; rate watching on your behalf | Online form or branch; little or no FX guidance |
| Tools | Spot, forward contracts, market orders, rate alerts | Spot transfers only for most retail customers |
| Best for | Larger or recurring transfers: property, emigration, business payments, pensions | Small, occasional payments where convenience matters most |
| Protection | Client funds safeguarded with authorised payment institutions | Deposits FSCS-protected up to £85,000 |
Are currency brokers cheaper than banks?
On larger transfers, usually yes — and the difference comes almost entirely from the exchange rate margin rather than visible fees. Every provider buys currency at the interbank (mid-market) rate and sells it to you slightly lower. The size of that gap is the real cost of your transfer.
Here is an illustrative example. Suppose the mid-market GBP/EUR rate is 1.1600 and you are converting £100,000:
- A provider applying a 2.5% margin would exchange at around 1.1310, producing €113,100.
- A provider applying a 0.5% margin would exchange at around 1.1542, producing €115,420.
That is a difference of €2,320 — roughly £2,000 — on a single transaction, with no “fee” appearing on either statement. The larger the transfer, the more the margin matters, which is why specialist brokers concentrate on property purchases, emigration, inheritance and business payments. You can check the live mid-market rate for any pair on our exchange rates hub and compare it against any quote you are given.
How do currency brokers make money?
Currency brokers make money from the spread between the rate they obtain in the wholesale market and the rate they offer you. There is no subscription, and reputable brokers do not charge transfer fees on larger amounts. Because brokers handle high volumes of currency, they can work from a much smaller spread than a bank applies to retail customers and still run a sustainable business. A good broker will explain this openly if you ask — transparency about how the margin works is one sign you are dealing with a credible firm.
Are currency brokers safe?
Money sent through a properly authorised payment firm is protected by safeguarding rules, which is a different mechanism from the bank deposit protection most people know. It is worth understanding both before choosing where to send a large sum.
Bank deposits in the UK are protected by the Financial Services Compensation Scheme up to £85,000 per person, per institution. Money moving through an authorised payment or e-money institution is instead safeguarded: under FCA rules it must be held separately from the firm’s own money, in accounts at credit institutions, so that client funds can be returned if the firm fails. The FCA explains the distinction in its consumer guidance on using payment service providers. Neither mechanism is “better” in all cases — they are designed for different things. Transfer money is typically in transit for hours or days, not held as savings, and safeguarding is built around exactly that use.
The practical safety check is authorisation. Before sending money to any provider, look the firm up on the FCA Financial Services Register, confirm the firm reference number matches the one on its website, and verify the contact details — clone firms copy legitimate brokers’ names. Our guide to checking a currency broker is legitimate walks through this step by step, and we have also written about what happens if a broker stops trading.
Cambridge Currencies operates with FCA-authorised partners Currencycloud (FRN 900199) and ScioPay (FRN 927951). Client funds are held in safeguarded accounts with those partners — see our guide to brokers with safeguarded funds for more detail on how this works.
What can a broker do that a bank can’t?
Beyond the rate itself, the main difference is risk management. A forward contract lets you lock today’s exchange rate for a payment due months ahead — useful when you have exchanged contracts on a property abroad but completion is twelve weeks away, or when a business knows it must pay a supplier invoice next quarter. A market order targets a specific rate and executes automatically if the market reaches it. Banks rarely offer either to retail customers.
The other difference is a person. “Most people only deal with a six-figure currency transfer once or twice in their life — a house sale, an inheritance, a move abroad,” says Anthony Bull, CEO of Cambridge Currencies. “A bank gives them a web form and a rate. What they actually need is someone who watches the market every day, understands what the transfer is for, and tells them honestly when waiting could help and when it’s just risk. That conversation is the product.” Every Cambridge Currencies transaction is completed by phone with a dedicated specialist — and for context on what currently moves the major pairs, see our GBP/EUR forecast and the wider currency forecasts hub.
When is a bank — or an app — the better choice?
Honesty matters here. For a one-off payment of a few hundred pounds, the margin difference may amount to a few pounds, and your bank or a transfer app is perfectly sensible. Apps such as Wise and Revolut are well designed for small, frequent, self-service payments. The case for a specialist strengthens as the amount grows, the timing matters, or the payment repeats — we have compared the options in detail in Is Wise safe for large transfers?
As a rule of thumb: under £2,000, use whatever is most convenient; £2,000–£10,000, compare the rate you are offered against the mid-market rate before deciding; above £10,000 — and certainly for property purchases, emigration or business foreign exchange — a specialist broker is usually worth a conversation.
Frequently asked questions
Are currency brokers cheaper than banks?
Usually, yes — particularly on transfers above £5,000–£10,000. The saving comes from a tighter exchange rate margin rather than lower fees, so always compare the actual rate offered, not just the fee.
Are currency brokers regulated?
Payments in the UK must be made through firms authorised or registered with the FCA. Some brokers hold their own authorisation; others, including Cambridge Currencies, operate with FCA-authorised payment partners — in our case Currencycloud (FRN 900199) and ScioPay (FRN 927951). Always verify the firm on the FCA register before sending funds.
Is my money FSCS-protected with a currency broker?
No — FSCS cover applies to bank and building society deposits. Money sent through authorised payment institutions is protected by FCA safeguarding rules instead, which require client funds to be held separately from the firm’s own money so they can be returned if the firm fails.
How do currency brokers make money?
Through the spread between the wholesale rate they obtain and the rate they offer you. Reputable brokers charge no transfer fees on larger amounts and will explain their margin if asked.
Do I need to be wealthy to use a currency broker?
No. Brokers add the most value on larger sums, but many clients use them for regular smaller payments too — pension income, overseas mortgages or school fees — where a better rate on every payment adds up over a year.
Is a currency broker better than Wise or Revolut?
They serve different needs. Apps suit small, self-service payments. A broker suits larger or time-sensitive transfers where a dedicated specialist, forward contracts and phone-based dealing matter more than an app interface.
How long does it take to open an account with a broker?
Often the same day. You will need ID and, for larger sums, evidence of where the money has come from — a normal part of UK anti-money-laundering checks, whichever provider you use.
Speak to a specialist before your next transfer
If you are weighing up a bank against a broker for an upcoming transfer — a property completion, a move abroad or regular business payments — a short phone call will tell you exactly what your money would achieve with a specialist. Every Cambridge Currencies transaction is completed by phone with a dedicated specialist who handles your transfer from first quote to confirmed payment. Request a quote and compare for yourself.
