A money transfer business or agency is a business that acts as a third-party agent that facilitates money transfers and payments among parties in different locations. Please note that the currencies that are available for a money transfer business are dependent on the country they are domiciled.

But on average, you are expected to have the United States Dollars, Pound Sterling, and of course the Euro. Both the World Bank Annual Remittances Data and Eurostat base their estimates on the UK’s balance of payments.

According to this, remittance outflows from the UK stood roughly at GBP 7.7 billion in 2018. The global remittance market size was valued at $701.93 billion in 2020 and is projected to reach $1,227.22 billion by 2030, registering a CAGR of 5.7% from 2021 to 2030.

Steps on How to Start a Money Transfer Business in the UK

  1. Conduct Market Research

If you are considering starting a money transfer business in the UK, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your money transfer business in the UK should be to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source information that will help you maximize your business, give you a clue of what your potential market will be looking out for from a money transfer business in the UK and also help you operate your money transfer business in the UK with less stress and of course, build the business to profitability.

a. Who is the Target Market for a Money Transfer Business in the UK?
  • Expatriates
  • Students
  • Migrants
  • Businessmen and women
  • Small scale businesses
  • Clearing and forwarding agents
  • Online Traders
  • Corporate Executives.
b. Is Money Transfer Business in the UK a Profitable Business?

Yes, the money transfer business in the UK is profitable. As a matter of fact, UK banks charge SMEs £4 billion in hidden money transfer costs per year. This is to give you an idea of how profitable the industry is.

c. Are There Existing Niches in the Industry?

Yes, there are existing niches when it comes to the money transfer business, and here are some of them;

  • In-store money transfer operations
  • Retail money transfer
  • Online money transfer (Apps based)
d. Who are the Major Competitors?
  • Google Pay
  • CashApp
  • PayPal
  • Western Union
  • Venmo
  • Zelle
  • ApplePay
  • Paytm
  • Azimo
  • TransferWise
  • MoneyGram
  • Currencies Direct
  • XE Money Transfer.
  • OFX
  • SendFX
  • TorFX
  • WorldFirst
  • TransferWise
  • CurrencyFair
  • TorFX
e. Are There City Regulations or Zoning Laws for Money Transfer Business in the UK?

Yes, there are regulations and zoning laws for money transfer businesses in the UK. For example, according to HM Revenue and Customs in the UK, some conditions have to be met for businesses to be considered MSB. Please note that MSBs exist to prevent money laundering or terrorist financing risks and crimes. Money transfer businesses in the UK (MSBs) have to comply with these regulations.

f. Is There a Franchise for Money Transfer Business in the UK?

Yes, there are franchise opportunities for money transfer businesses in the UK. Here are some of them;

  • MCT World – Money Transfer Franchise
  • Western Union
  • Xpress Money
  • Exchange4free
  • MoneyGram
  • Paysera
  • TransferWise
g. What Do You Need to Start a Money Transfer Business in the UK?
  • A Feasibility Report
  • Business Licenses and Permits
  • Registration with HRMC only (Money Service Business License UK)
  • Registration with HRMC and application to the FCA to become a PI or SPI (Money Transmitter License UK)
  • A registered address (office facility)
  • HM Revenue and Customs (HMRC) for Value Added Tax (VAT) and/or Pay As You Earn (PAYE)
  • A Corporate Bank Account
  • Reliable Software Application
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a money transfer business are;

Creative Money Transfer Business Name ideas for UK
  • Kingston Money Transfer Ltd.
  • Transfer Pro Ltd.
  • Money Way International
  • E-Money UK, Ltd.
  • Money Fly, Ltd.
  • Over Sea™ Money Transfer, Ltd.
  • Andrew Borough© Money Transfer, Ltd
  • Porcupine™ Money Transfer, Ltd.
  • Sea Wave© Money Transfer, Ltd.
  • King’s Court Money, Ltd.
  • Senders® Money Transfer, Ltd.
  • Rowland Group, Ltd.
  • Praise Ferdinand™ Money Transfer, Ltd.
  • Beckham Pekham™ Money Transfer, Ltd.
  • Currency Changer® Money Transfer, Ltd.
  • Trio® Money Transfer, Ltd.
  • Rees Morgan™ Money Transfer, Ltd.
  • Money Deal© Money Transfer, Ltd.
  • Silver Horizon® Money Transfer, Ltd.
  • Global Trottlers™ Money Transfer, Ltd.
  1. Register Your Business

a. What Type of Business Structure is Best for Money Transfer Business in the UK?

The United Kingdom has a wide array of options that you can choose from if you are looking for a business structure to build your business on. The most important thing is that you should select a business structure that will best serve your overall business vision and mission.

In the UK, you have the option of starting your business as a Sole trader, a Limited company, a Private limited company (LTD or Ltd), a Public limited company (PLC), a Limited liability partnership (LLP), or a Guarantee Company (LBG).

b. Steps to Register a Business in the UK

One of the most important steps that you should take on your quest to start a business in the UK is to register the business name with the regulating authority. You can register your new business at Companies House on GOV.UK.

Please note that the entire process will take you about 30 minutes if you have all the required details ready. In the United Kingdom, you can register your business online but it will cost you £12 to register a company online (you can pay this fee via PayPal, debit card, or credit card).

It takes on average 24hrs for your company to be registered. Please note that to register a business in the UK, you will need to submit the following documents and information:

  • A company name
  • Valid ID
  • Address for the company
  • One or more directors’ names and details.
  • Details of the company shares, shareholding, and shareholders (with at least one shareholder).
  • A Memorandum and articles of association. This is a standard document that shareholders create and agree to that outlines the company’s written rules, it’s usually very standardized unless you have specific needs.
  • Detailed information on anyone who owns a significant interest or control in the company (this means anyone who owns 25% or more shares or voting rights in the company).
c. What Type of License is Needed to Open a Money Transfer Business in the UK?
  • General Business License
  • Money Service Business License UK (MSB license in the UK)
  • Small Electronic Money Institution License (UK) Small EMI License UK
  • Electronic Money Institution License UK (EMI License UK)
  • Full Authorized Payment Institution License UK (full API license UK).
d. What Type of Certification is Needed to Open a Money Transfer Business in the UK?

You don’t need any special certifications to open a money transfer business in the UK.

e. What Documents are Needed to Open a Money Transfer Business in the UK?
  • Business and liability insurance
  • Council Permit
  • HM Revenue and Customs (HMRC) for Value Added Tax (VAT) and/or Pay As You Earn (PAYE)
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Money Service Business License UK (MSB license in the UK)
  • Small Electronic Money Institution License (UK) Small EMI License UK
  • Electronic Money Institution License UK (EMI License UK)
  • Full Authorized Payment Institution License UK (full API license UK).
  • Employment Agreement (offer letters)
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering opening a money transfer business in the UK, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Money Transfer Business in the UK?

There is no clear-cut startup cost for a money transfer business in the UK because there are loads of factors that will determine the cost of starting the business.

Have in mind that aside from your working capital and business setup capital, you need to register with HMRC under the money laundering regulations and pay £110. For the second step, you need to register as a “small payments institution” with the Financial Services Authority. The fee is £500. Third step: form an off-the-shelf company for about $150.

b. What are the Costs Involved in Starting a Money Transfer Business in the UK
  • Business Registration Fees – £12.
  • Legal expenses for obtaining licenses and permits – £1,300.
  • Marketing, Branding, and Promotions – £1,000.
  • Business Consultant Fee – £2,000.
  • Insurance – £1,400.
  • Rent/Lease – £35,000.
  • Other start-up expenses like commercial satellite TV subscriptions, and phone and utility deposits (£1,800).
  • Operational Cost (salaries of employees, payments of bills et al) – £30,000
  • Working Capital – £500,000
  • Store Equipment (cash register, security, ventilation, signage) – £1,750
  • Furnishing and Equipping – £7,500
  • Website: £600
  • Miscellaneous: £1,500
c. What Factors Determine the Cost of Opening a Money Transfer Business in the UK?
  • The size of the money transfer business
  • The choice of location and the currency you want to deal on
  • The required licenses and permits
  • The cost for branding, promotion, and marketing of the money transfer business
  • The cost of furnishing and equipping your office facility
  • The cost of insurance
  • The cost of registering the business
  • Ongoing expenses
  • Cost of recruiting and training your staff
  • The cost of purchasing and customizing uniforms
  • The cost of the grand opening of the money transfer business in the UK
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new office facility for your money transfer business in the UK, but, if you have the required finance, it will pay you to build your own office facility. The truth is that building or reconstructing an office facility will help you come up with an office facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Money Transfer Business In the UK?
  • Supplies (inventory expenses)
  • Bank charges
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (President) – £45,000 Per Year
  • Manager – £32,630,000 Per Year
  • Accountant – £28,100 Per Year
  • Money Transfer Agent – £26,200 Per Year
  • Customer Services Executive – £23,000 Per Year
g. How Do You Get Funding to Start a Money Transfer Business in the UK?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and your friends.
  1. Write a Business Plan

a. Executive Summary

Currency Changer© Money Transfer Agency, Ltd is a registered and licensed international money transfer agency. We have been able to secure all the required documentation and a standard office facility that is highly suitable for the kind of business we are into.

Our head office will the situated in Tower Hamlets, London Borough and we hope to, sometime in the nearest future, have branches in major cities in the United Kingdom. Currency Changer© Money Transfer Agency, Ltd will be involved in all aspects of money transfer services, we will act as third-party agents that facilitate money transfers and payments among parties in different locations.

b. Services
  • In-store money transfers operations
  • Retail money transfer
  • Online money transfer.
c. Mission Statement

Our mission is to establish a standard and world-class money transfer agency that will make available a wide range of services in the industry.

Vision Statement

Our vision is to build a global money transfer brand with an active presence all across the globe.

d. Goals and Objectives

The goals and objectives of a money transfer business are basically to facilitate the transfer of money for clients from one location to another.

e. Organizational Structure
  • Chief Executive Officer (President)
  • Manager
  • Accountant
  • Money Transfer Agent
  • Customer Services Executive

Marketing Plan

a. SWOT Analysis
Strength:
  • Ideal location for a money transfer business in the UK
  • Highly experienced and qualified employees and management
  • Access to finance from business partners
  • Reliable and efficient inventory management system and money transfer app.
Weakness:
  • Financial constraints
  • A new business that will be competing with well-established money transfer agencies and banks in the UK.
  • Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
Opportunities:
  • Rising globalization and labor mobility continue to benefit the industry’s revenue performance and online operators have benefited from their lower cost base and the rise of online transfers.
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • The arrival of a new money transfer business within our market space
  • Economic uncertainty
  • Liability problems
  • The UK government could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
a. How Do Money Transfer Businesses in the UK Make Money?

Money transfer companies make money by applying a spread/margin on each transfer they make on behalf of their clients. Some of them also apply a direct fee per transfer.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your money transfer business by sending introductory letters alongside your brochure to e-commerce traders, international students, expatriates, migrant communities, and other key stakeholders throughout the city where your money transfer business is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business to give your business an online presence
  • Directly market your products.
  • Advertise our business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Service?

It is important to state that there is no standard price when it comes to the amount charged for money transfers from the UK because this will depend on the organization. For example, when sending money directly to another PayPal account, PayPal charges 5% of the transaction with a minimum fee of $0.99 and a maximum fee of $4.99.

b. How Much Profit Do Owners of Money Transfer Businesses in the UK Make a Year?

The profit you stand to make as a money transfer business owner is not fixed, but you can rest assured that if your business is located in a city with high demand for money transfer services or if you have an active online money transfer service (app), you are sure going to make a fortune from the business.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the money transfer business
  • The location of the money transfer business
  • The management style of the money transfer business
  • The business approach of the money transfer business
  • The advertising and marketing strategies adopted by the money transfer business
  • The number of years the money transfer business is in business
d. What is the Profit Margin of a Money Transfer Business in the UK?

The profit margin of a money transfer business in the UK is not fixed. It will depend on some factors that are unique to the type of services and operations you are running, the country involved, and some factors that are unique to your business location.

e. What is the Sales Forecast?

Below is the sales forecast of a money transfer business in the UK. It is based on the location of the business and other factors as it relates to such startups in the United Kingdom;

  • First Fiscal Year: £540,000
  • Second Fiscal Year: £1.2 million
  • Third Fiscal Year: £2.5 million
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Money Transfer Business in the UK?
  • The commercial activities in the location
  • The demand for money transfer services in the location
  • The purchasing power of businesses and the residents of the location
  • Accessibility of the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What City is Best to Open a Money Transfer Business in the UK?
  • London
  • Manchester
  • Newcastle
  • Middlesbrough
  • Kingston Upon Hill
  • Chelsea
  • Dorchester
  • Norwich
  • Ipswich
  • Cardiff
  • Portsmouth
c. What Equipment is Needed to Operate a Money Transfer Business in the UK?
  • Computers
  • Money transfer software apps.
  1. Hire Employees

When it comes to hiring employees for a standard money transfer business in the UK, you should make plans to hire a competent chief executive officer (president), manager, money transfer agent, and customer services officer.

  1. Launch the Business Proper

In recent times, no money transfer business in the UK opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the money transfer business, you will officially inform people in your city that your money transfer service is open for business.

a. What Makes a Money Transfer Business in the UK Successful?
  • Choose a good location to launch the business
  • Engage in the transfer of money to different countries of the world
  • Be deliberate with your marketing and sales approach
  • Encourage the use of word of mouth to promote your money transfer business
  • Leverage all available online and offline platforms to promote your money transfer business
b. What Happens During a Typical Day at a Money Transfer Business?
  • The business is open for the day’s work
  • Customers walk in to transfer money
  • Marketing/website upkeep
  • Administrative duties
  • The account is reconciled for the day
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Money Transfer Business?
  • A proper grasp of how international money transfers work
  • Excellent customer services skills
  • Interpersonal skills (Networking skills)
  • Accounting and bookkeeping skills (Understanding finance and budgets)
  • Business management skills
  • Bargaining skill
  • Understanding of international currency transfer compliance requirements
  • Analytical skills.
  • Accountability and adaptability
  • Ability to receive feedback
  • Communication skills
  • Work experience in a money transfer business environment
  • Experience in managing people
  • Experience in business administration.