What is an international wire transfer?
An international wire transfer is a method to transfer funds electronically from a bank account in one country to another bank account in a different country. It is also known as international bank transfer or credit transfer. Wire transfers do not involve the physical exchange of cash, rather all transactions are electronic. They can be sent between banks, or through non-bank services, for example, international remittance through Western Union. International wire transfers can be a fast and safe way to send cross-border B2B payments, anywhere in the world. You can use wire transfers to pay your suppliers, affiliates, or employees, who are based in another country.
How does an international wire transfer work?
International wire transfers are made via the SWIFT network. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is the primary messaging standard that is followed globally to send information from one bank to another. Over 11,000 banks in 200+ countries are a part of the SWIFT network, processing over €139 trillion in transactions every year. SWIFT gives every bank a unique identifier code called the SWIFT ID (also called the bank identifier code or BIC) to ensure transfers always reach the intended recipient.
Fund transfers can take anywhere between 1-5 business days. Each bank that is involved in performing or routing an international wire transfer charges a processing fee. Additional FX conversion fees will apply, in case funds are converted into another currency.
How do you send an international wire transfer?
To send an international wire transfer, you must first collect all the relevant information related to the recipient, such as IBAN number, BIC/SWIFT code, bank account number, etc.). Then you submit these to your bank, either in person or online through your bank’s website or mobile app. A payment service provider like Novalnet can also help you send out an international wire transfer. The payment would be processed on the same day if submitted before the daily cut-off time, which varies from bank to bank. If submitted later, it gets processed the next business day. Once the bank processes the transfer request, the funds are deducted from the sender’s bank account and credited to the payee’s account within one to five working days.
How long do international wire transfers take?
International wire transfers can take anywhere between 1 – 5 business days, depending on where you are sending money to and when. The reason why such transfers take time are because processing them involves several processes:
- In each transaction, funds are sent over the correspondent banking network and pass through up to three intermediary banks, before they reach the recipient’s bank account.
- Payments are processed in batches and according to local banking hours, which can cause delays. Plus, some banks have lower processing capacity or lack the resources to monitor payments in real time.
- International wire transfers go through strict fraud prevention processes that are put in place by banks. Compliance checks need to be carried out when payments pass through different countries and jurisdictions, leading to further delays.
Are international wire transfers safe?
International wire transfers are safe. As long as you provide the correct details of the recipient and they use established banks. Once the funds reach an intended recipient’s account, the transaction is complete and they can access the funds immediately. Before you send a wire transfer, ensure you have the correct banking details of the party you are sending money, so that the funds reach the right party. Hence, when you wire a large amount, you must inform the recipient about the transfer to be extra safe. The party receiving the funds should also ensure no one has access to their bank account.
How Can Novalnet Help?
If you want to know more about international wire transfers, we can help. As trusted advisors to Europe’s leading brands on all things payments, our state-of-the-art technologies and methods help businesses like yours accept payments globally. From our instant payment plug-ins to our AI-based risk management tools, we have the resources to get you up and running with your payments in a short time, and with zero hassle. Reach out to us today to know more.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.