How long do international bank transfers take?

Posted on the 18th February 2020 by Alex Garbutt in Team blog, SME blog, Finance

International bank transfers are a simple and effective way of paying someone overseas. However, there’s a lot that goes on behind the scenes and several factors that determine how long it takes for an international bank transfer to arrive with its recipient. 

How do international bank transfers work?

To understand how long it takes to make an international bank transfer, you have to look at how they work. The majority of international payments are made by SWIFT. SWIFT is a messaging network that allows banks and financial institutions to send and receive information about financial transactions. 

SWIFT enables banks to send funds to and from one another easily, even if they don’t have a direct relationship. Let's say you need to send funds from your UK-based bank account to a supplier based in China. Your bank may not have a relationship with the Chinese bank, so they would need to route the payment via an intermediary. Such intermediary banks act like postal depots. They handle your payments and make sure they are sent on to the correct bank.

So why does this affect the speed of my payment?

If each bank in the chain processed your instructions as soon as they received them, payments would be really fast. But it’s not quite that simple, mainly due to the risk of fraud.

Each bank has to carry out its own checks on the payment to satisfy its anti-fraud and financial crime responsibilities. This is particularly important given that bank transfers may only be recalled in limited circumstances.

The checking process takes time and means that it can take anywhere from a few hours to a week for your recipient to receive a SWIFT payment. The time it takes to process the instruction will depend on the policies, processes, and efficiency of each bank.

But other things can cause delays...

Does the destination of the payment make a difference?

Some countries have better financial infrastructure than others, and also different rules to follow. The less developed the financial infrastructure the longer it takes for banks and financial institutions to talk to each other and the longer your payment will take to be processed. 

Time taken will also vary depending on how many processes and checks each bank has to go through when looking at payments, and this will change from country-to-country. 

Does it matter how much I send?

As a rule, the larger the transaction, the more checks will be carried out before it is approved. While fraudsters and money-launderers do make small payments (and one of the things that financial firms check for is numerous small payments to the same account) it is more efficient to send a lump sum.

You may or may not know that your bank account has limits on how much you can transfer per transaction and per day. Transfers over a certain amount will be blocked until they have been verified by your bank, or unless you have arranged for an exception. One of the reasons for this is to prevent fraud and allow your bank to make additional checks before making large payments. Routing and intermediary banks will also have transaction limits for certain customer types, currencies, originating and destination countries; any of which can impede the smooth flow of your payment.

It's always a holiday somewhere in the world!

Banks are closed on holidays and weekends. And this doesn’t just mean your local branch, but the back office who would be processing the payment, too. 

Holidays and weekends can vary from country-to-country. For example, your payment to the UAE won’t arrive on a Friday or Saturday, as that’s their weekend. 

Likewise, be aware that bank holidays in your recipient’s country will affect your payment. If you need a payment to arrive on a specific date, make sure you check whether your payment could be delayed by any non-working days.

Finally, don't forget about time zones! If you send a payment from the UK to Australia expecting it to arrive on the same calendar date, then you will probably be out of luck. It’s the middle of the night in Australia and the payment won’t be processed until someone’s awake to do it.

Nobody's perfect

Now that we've taken fraud and time zones into account, surely nothing else can go wrong? One final thing to do is to check that you're sending your payment to the correct place. For funds to be delivered on time and to the right person we need to know the correct destination account. This is usually in the form of an International Bank Account Number or 'IBAN'. IBANs tend to be long - maybe 20 characters or more - and consist of numbers and letters. Double-check that your recipient has provided you with the correct one and that you've entered it correctly.

Your bank or payment provider is likely to carry out some basic validation on the IBAN by checking its format and length - in other words, to make sure it looks right - but it can’t yet verify that the account number you enter is the one you mean. Also be sure that you provide the correct account name for the person you're trying to pay as, increasingly, and to help prevent fraud, receiving banks will not accept payments into accounts where the names do not match. 

Errors with the account details are unlikely to be picked up until your payment reaches the recipient’s bank and they can’t match it to a customer's account. If this happens your funds should be returned, but this can be a slow process. 

So what does this mean to me?

Take care when you make any payment, international or otherwise. Make sure you're happy to send money to the person requesting it, and that you've checked the payment details carefully.

Make sure the payment service you using, whether it's your bank or a specialist provider like Money Mover, helps with the process. Here are some things to think about.

Does it look like it's carrying out some validation on the recipient account details and can I select things like the payment date for myself? Am I kept informed about the progress of the payment? Also, think about what happens if something should go wrong. Can I access the MT103 confirmation, which shows the route of the transaction and acts as a proof of payment, easily and for free? What if I need to speak to somebody? Can I get in touch with a real person directly by webchat, email or even on the phone? 

Check out the reviews to see whether the provider has a good track record for resolving issues - it's the measure of any great service.