Paying for nursery fees for granddaughter in New Zealand

If finances allow you could transfer a lump sum to your daughter's bank account, then there would only be one transaction fee, rather than one a month or whatever.

Does your DD have a UK bank account? If so you could pay the money directly to her.
My son lives in the States and I just put Christmas and birthday money into his UK HSBC account. It doesn't cost him anything to withdraw it.

I believe that transfer fees are down to the bank etc that makes the transfer and some are much cheaper than others, shop around. Google best transfer rates.
Could you use Paypal, I regularly use paypal to order from China direct and never get charged any extra, in fact I get a good ex. rate.

Riverwalk and janeainsworth - this is one consideration. She does have a UK bank account (to repay her student loan) and I could just transfer the money into that. I really wanted to do it as a surprise/Christmas pressie.
Pompa - I have a distrust of PayPal - there's not been very good press about their way of working at times. I had an issue with scammers trying to get me to pay money into a Paypal account when I was trying to sell my dd's car. Apparently they then could have collected the car and taken my money and there is nothing PayPal could have done about it (all complicated, but had become a rather lucrative way of ripping people off).

You can get tax relief (in this country) on money regularly given to your grandchildren for education and so on. That might counterbalance the fees.

My experiences with Paypal have all been good, and I use it a lot, not just for Ebay. Scammers do send me emails trying to get me to send them money, or they say they have taken it and if it is a mistake - log in here. These are scams just as all the other bank scams I get daily and go in y trash. Paypal request you send them copies of any email you think might be a scam, and they always reply.

To transfer £500 to New Zealand via Paypal costs £2.50.

If anything goes wrong Paypal are really good with support and putting things right. DD had £1,000 taken out of her account by a rogue Ebay buyer. She contacted Paypal at 11pm when she discovered it, they were in contact immediately...went on into the small hours and by the next day the money was back in her account.

I use Paypal all the time for my work as my clients are all over the world and the exchange rate hassle is sorted out by PP for a very small amount... so small I can't say I've ever noticed it. I leave it in my account (which is known as Grandma's Holiday Fund) and then use it for life's little luxuries, as well as trips to the UK.

As Pompa has said if you ignore everything in your mailbox that looks in the least bit suspect, you'll be ok. And if in doubt contact Paypal before opening any dubious emails from them. Better safe than sorry.