Understanding the Reasons Behind Money Transfer Issues

April 26, 2023

Understanding the Reasons Behind Money Transfer Issues

There are various reasons why issues may arise with money transfers, and it's essential to identify the underlying causes instead of simply retrying the transaction. Only by having a proper understanding of the issue is it possible to avoid similar problems in future. In the publication www.finance-monthly.com, we explained why problems with money transfers arise and discussed how such situations should be handled.

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Money transfers are typically processed instantly, but several factors can lead to delays, which may take up to several hours, overnight, or even the next business day. These factors include transfer timing, location, the currencies involved, security checks, and the purpose of the transaction. International bank transfers may also experience delays due to limited staff, changing working arrangements, or global events, such as natural disasters. It’s essential to consider bank holidays and cut-off times as they may cause delays, and it’s important to note that bank transfer times only include business days and exclude public holidays.

— Challenges with International Bank Transfers

International bank transfers come with various challenges, one of which is currency conversion, which can result in delays. Processing times for bank transfers can vary depending on the destination country and the currencies involved.

Another important factor that can affect how long an international bank transfer takes is time zone differences. If you’re sending money to a country with a significant time difference, it’s essential to consider how this can impact the bank transfer process, which may take longer than expected.

Providing the necessary documentation can be a challenge when it comes to international bank transfers, and failure to do so can result in significant delays. Each country has unique requirements, which can be complicated to navigate, making it essential to have all the required documentation in place to avoid any delays in processing.

— Brexit-Related Challenges in Cross-Border Transactions

According to British fintech company, new payment difficulties have emerged in the UK after Brexit, including additional third-party bank charges and additional data requirements. Due to the UK’s departure from the EU and EEA, payments between the UK and EEA countries no longer fall under the PSD2 definition of intra-EEA payments. As a result, certain European banks now consider SEPA credit transfers and direct debit transactions between the UK and Europe as cross-border, leading to additional bank charges. Moreover, transferring money between the UK and the EU now requires additional information under the Funds Transfer Regulation of the European Union, which may result in payment rejection if not provided.

— Fraud Prevention Procedures

When initiating an international wire transfer, banks must follow extensive fraud prevention procedures. For instance, the SWIFT network mandates that each transfer include information on up to three correspondent banks before reaching its intended destination. Additionally, once the funds have arrived at the destination, the recipient’s bank may have its own fraud prevention procedures, which could further delay the payment.

Furthermore, to comply with anti-money laundering regulations, we must provide as much accurate information as possible about the recipient before the payment can be processed. This can be particularly challenging for companies with complex ownership structures, such as startups, which often have new investors and beneficiaries joining during project development.

Read the full article on www.finance-monthly.com! 

Finance Monthly is a global publication that provides news, commentary, and analysis to those in the corporate sector. With a readership of 195,880 people each month, Finance Monthly delivers finance news coverage across various platforms. Its editorial policy is to provide insight and analysis on topical news that affects the financial world.   

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