The main concerns of our readers when transferring money abroad are generally cost and reliability, but an increasing number have enquired about the issue of speed. Many have raised such questions as “How long will it take for my money transfer to arrive to get from country A to country B?” or “Who is the fastest overseas money transfer provider?” – We will address these questions, but first we recommend reading our piece on “How Wire Transfers Work“ so that the process is clear to you.
Speed of online overseas money transfers
With that in mind below are the cut off times of the most popular currencies for Barclays customers making a payment through their online banking portal (something the FX broker is likely to do):
|Same day value currencies|
|Currency Payment||Currency Code||Cut-off time|
|Mexican New Peso||MXN||9:15|
|South African Rand||ZAR||10:45|
|All are UK times|
|Currencies for value next working day|
|Currency Payment||Currency Code||Cut-off time|
|United Arab Emirates Dirham||AED||14:30|
|Hong Kong Dollar||HKD||14:30|
|New Zealand Dollar||NZD||14:30|
|All are UK times|
Source: Barclays, 2018
Not sure which provider to use for your internatioal money transfer?
Understanding the factors behind how long it takes
With the ever-growing number of online money transfer services and mobile apps as well as online money transfer functionality through online banks, it is safe to say that the vast majority of transactions are now done online.
The general rule of thumb is that most online transfers abroad to popular destinations are a “same-day” transaction as long as you complete your order and fund it before noon on the day of your value dateAfter that time, the transfer may not take place until the next day. This is true for money transfer companies as well as for banks. Does this mean that the money transfer, from A to Z, will be only 24 hour long? Of course not. Below we look into the timings in more detail.
Firstly, it can be said that most money transfer providers are registered and headquartered in the UK and bank with Barclays. And a smaller number with Natwest. Those operating overseas in the US and Asia will likely be using Citi or Deutsche Bank. And as you make a trade with an FX broker that broker will book an exact matching trade with one of their banking partners to make the payment. There is no speculation from the FX broker which is good news for the customer as this massively reduces risk. But it also means the broker will not necessarily hold high reserves of currencies, particularly those considered to be exotic. So they will be dependent on receiving the funds back from their banking partner to release the payment in your requested payment destination.
For a full list of currencies you can refer to Barclays resources on international payments, however it’s important to note the broker you’re working with will not likely offer all of the corridors provided by Barclays given the small number of clients that will be looking to send money to those destinations. It’s also important to note these times are provided to Barclays internet banking customers who will already have deals funded through their bank account with Barclays. FX brokers are likely to provide a payment cut off time around 3 hours before these times as they will still need to receive and then reconcile your funds to the trade you’ve booked.
Can payments be processed faster?
The truly global and best ranking money transfer providers such as Currencies Direct, World First and OFX, do hold a couple of tricks up their sleeve to process international payments even faster. Rather than by the end of the day, payments can go through in a matter of minutes. Even back in 2012 WorldFirst held the record of the fastest international payment completing a GBP to EUR payment in 6min 49sec with payment processing generally getting faster since then. If speed really is a key consideration for you or your business it’s worth asking the right questions and considering:
Does your broker operate Straight-Through-Processing (STP)? If this is the case, providing your payment is set up correctly and the correct reference is provided then payments can be reconciled in a few minutes. As soon as your money is received by the broker they match it to the trade and generate the outgoing payment to your requested destination all without any need for human intervention.
If your broker does offer STP be sure to understand the criteria that needs to be met in order to fulfill trades automatically. One of the absolute no go areas for a broker is to fund a trade with another clients money. So if the process is to be automated chances are you’ll have to provide your individual client number in your reference which only you know to ensure STP criteria is met, otherwise the payment may drop out and require manual allocation causing unnecessary delays.
Does your broker hold local bank accounts in a number of countries? The larger players are likely to do so, meaning they can quickly receive your money from the remitting country with a local account and then locally disperse your outgoing payments in the beneficiary country too. Not only speeding up the process but saving on costly international payment fees.
In line with the above question, does your broker hold reserves of currencies too? Again for the larger brokers chances are that for the more popular currencies such as GBP, EUR, USD and AUD they are likely to. Meaning they won’t need to wait for your funds to arrive from their banking partner in the destination country before having the local funds to release your payment.
Some destinations (particularly poorer and less developed countries) have cumbersome banking systems. This means that although the money has been sent abroad, there may be a delay of a few days until it is actually seen in the recipient’s account.
There’s also an argument that banks actually prefer to take longer to process your transaction. The most common reason cited for this is the greed of banks and the fact they will receive interest on any surplus cash balances they hold at the end of the day. In truth though, banks are not looking at this as a big money earner, particularly with central banks offering incredibly low or even negative interest rates.
There is however another argument that banks prefer to do this for another reason to – in order to reduce risk. If we consider all the different types of risk involved with making a financial transfer; settlement and operational risk as well as anti-money laundering and fraud prevention. All occurring on distributed payment systems across multiple currencies through multiple currencies with an increasing amount of demand. Then it gets easier to understand how these risks are compounding and the added time frame they allow themselves ensures errors are kept to an absolute minimum.
Other factors to consider
How you fund the transfer can have a big impact on whether you achieve your original value date or not. Card payments are often instantaneous whilst bank transfers can take longer. If you’re transferring under £100,000 in the UK you should be able to send via faster payment which is more instantaneous than CHAPS. Be careful as some banks have a lower faster payment limit and are directing customers to CHAPS when they shouldn’t be which guarantees same day delivery but could be after your payment cut off time. It’s also much more costly than a faster payment too.
Additionally, some banks or FX companies can withhold a transaction for a variety of reasons. It could be that the details are incorrect or unclear, it may look suspicious and require more documentation, or it could simply be at the end of a long queue.
The bottom line is that no company or bank is willing to guarantee the exact time at which money will be received by the recipient party. Even if your provider processes everything on their end as fast as possible there are various other stakeholders who could cause delays outside of their control. They can give you a rough estimate on how long it should take (some companies like TransferWise or Azimo are very clear when presenting this information online), but no one will be willing to pay compensation if the money is not received within a specified time.
Thus, my best tip on this topic, whether you want a quick international money transfer or need to receive money from abroad in a hurry, is to be aware that there may be a delay for a variety of reasons, so allow at least four days for the money to reach its destination. Whether you are transferring money abroad for the purpose of property acquisition, mortgage payments, buying a car, or any other reason, make sure you tell the recipient party that you will try to make the payment instantly, but based on your experience, it may take up to four days to arrive. Better safe than sorry.
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Local payment times vary from country to country
Some destinations (particularly poorer and less developed countries) have cumbersome banking systems. And even in developed countries throughout the Eurozone the same could be said until recently as payment times would vary hugely depending on the country in question prior to the introduction of SEPA (Single Euro Payment Area). Spanish and Italian banks were notoriously a little slower in actually allocating funds once they had been received into their settlement account to the correct client beneficiary account. This changed with the introduction of SEPA and if you are making a payment to the eurozone a standard SEPA payment is always set to value T+1 and if your payment is urgent be sure to check your provider will send via urgent SEPA too in order for funds to be received on the same day. Globally there are still many countries where there may be a delay of a few days until it is actually reconciled by the beneficiary bank and seen in the recipient’s account.
The banking hours of your destination country also have to be considered. Even in two fairly advanced payment networks such as the UK and Australia if you are making a payment from the UK to Australia, and your provider holds a local AUD account in Australia, you will still have to wait for the Australian banking system to come to life again the following morning for local AUD payments to be processed.
Speed of remittances (immigrants sending money home)
The World Bank Remittances Data can give you a pretty good idea about the speed of several remittance services per location. The data is specifically tailored for money transfers to immigrants’ home countries, so the available locations include, for example, China, Romania, Pakistan, Sri Lanka, Vietnam, and so on.
From our analysis of the data, we have concluded that the fastest way to send small remittances abroad is via agents of Currency Transfer Companies like Western Union, MoneyGram, and Xpress Money (cash payments). While this method is nearly always the most expensive in terms of fees, sometimes speed is more important than price.
Therefore, our best tip is to use an expensive but ultra-quick service in urgent situations but to otherwise use an online provider.
Read our comprehensive FX FAQ, and get answers to questions such as:
- How do FX money transfers work?
- What types of premium features are available?
- How did money transfer services first come about?
- What do I need to make overseas transfers?