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Cut overseas bank-transfer charges

Many small businesses are losing out by using traditional bank systems to send money abroad. The high charges, commission and time delays in transferring cash overseas can soon whittle down the profits of a small company.

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If you are sick of shelling out to the big banks then there are alternatives. Both Girobank and the Co-operative Bank have a fixed-rate charge for sending money abroad regardless of the amount being sent. Girobank's Eurogiro service has a flat rate charge of £5 for its account holders and Co-op's Tipanet charges an £8 fixed fee. The typical charge for the same transactions by other High Street banks ranges from £14 to £26.

Geoff Seymour, senior banking manager at Girobank, said out that Girobank's electronic system is both quick and efficient and could radically cut the costs of money transfers for many UK companies. 'Many small businesses which are making a number of payments abroad on a regular basis are simply paying too much for the service. There is a certain degree of passivity - because they use their High Street bank for other financial services they don't shop around to find the more economic alternatives for sending money abroad,' he said.

Girobank can make transactions into 17 countries, including France, Germany, Iceland, Norway, Sweden and Japan. The service can guarantee three-day delivery for funds because cash is moved directly between customers' Giro accounts, thus cutting out banking chains. If a recipient does not hold a Giro account Girobank charges a £15 flat rate fee to use the SWIFT service.

UK businesses that don't have a Girobank account can still use the Eurogiro service on a direct debit basis with Girobank. The charge to non-account holders is the same £5 flat rate but the service can take longer than three days.

Seymour, at Girobank, said: 'You don't need to open a Giro account to use the Eurogiro service. However, we are finding that increasingly small businesses are setting up a Giro account specifically for this purpose.'

Tipanet, the Co-op Bank's system for sending money abroad, can be used by individuals as well as businesses with a Co-op account. There is no limit on the amount you can send. Tipanet has a fixed charge for the service, but the amount of time it takes to get money somewhere varies from three to five days depending on the country it is going to. But the bank says that customers will be told how long it will take from the outset. Tipanet reaches Belgium, Canada, France, Germany, Netherlands, Spain and the USA.

A spokesman at Co-op Bank said: 'The advantage of Tipanet is that you know up front exactly how much it is going to cost you and how long it is going to take to get your money where you want it to go, which isn't usually the case with other banks.'

For information on Giro compatible accounts for small businesses, offered by Alliance and Leicester, call 0800 21 48 07. Visit the Co-op Bank's website at www.co-operativebank.co.uk.

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