Breadcrumb

Are International Bank Transfers Reliable?

Written by

The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJun 20232 min read

Reliability is one of the chief concerns when making international bank transfers. No matter the amount of money at stake, security and the assurance that the money will arrive at its destination are imperative.

With that in mind, you may be wondering: is transferring money internationally between banks safe and reliable? In this post, we’ll endeavor to answer that question, as well as outline some alternatives for wiring money across borders.

Are international bank transfers safe?

Established and reputable, registered banks typically don’t pose any concerns from a security and credibility perspective. This makes them a safe choice for sending money internationally, to Europe or elsewhere.

While banks may be a secure option, they are certainly not the cheapest. According to a 2020 World Bank report, banks are the most expensive option for overseas payments, with fees being as high as 11% of the total transaction value.

Note also that banks cannot fully protect you in the case that you are sending the funds to a fraudulent party. This is not unique to banks, however, but any money transfer service. To avoid this being an issue, always be sure of the credentials of your recipient before making a transfer.

How do international banks transfers work

International bank transfers involve several steps. Below is a brief guide to the steps involved:

Making an international payment requires more information than domestic transfers, namely, legal name of business/individual receiving payment, IBAN,BIC/SWIFT code.
Once you, as payee, confirm an international transfer, the bank will deduct the funds from our account.
Next, the bank will notify the recipient’s bank and set up a route for the transfer. This will involve intermediary banks and institutions all linked up via SWIFT (Worldwide Interbank Financial Telecommunication).
SWIFT is only responsible for handling data such as account numbers, and not the funds itself. These are processed by other intermediary banks. As a result, your money passes through several middlemen, who all take a cut for their efforts. This makes transferring money in this way an expensive option.

A good way of understanding the accumulating costs is by comparing it to flying to a destination with no direct flights. You have to make several stops to get there, and at each layover you have to pay a fee. In the end, your trip gets more and more expensive as you pass in transit.

How long do international bank transfers take?

International bank transfers typically take 2-5 working days. However, it may take longer depending on the currencies involved (USD to EUR is usually quicker than USD to emerging market currencies), processing time at the receiving end, and the infrastructure set up in the destination company.

Alternatives tobanks for international transfers

As discussed, using banks for international transfers is expensive. Fortunately, there are a number of cheaper options. Some of these are outlined below:

Wise

Formerly TransferWise, Wise transfers $6 billion a month for in excess of 13 million customers annually, making it a reliable and safe money transfer service. It also offers much lower fees than bank transfers and will often deliver the funds quicker.

Western Union

Having sent billions of dollars across borders, Western Union is the biggest and most established money transfer service provider in the world. However, the fees for Western Union tend to be a little higher than Wise, although they do transfer money to more countries.

Receiving international payments with GoCardless

GoCardless enables businesses to receive international payments from customers from over 30 countries at the real exchange rate. It does this by offering the local bank debit option in each of the supported countries.

This allows customers to pay in their currency and for the merchant to receive it in their own currency without the need for foreign bank accounts.

GoCardless offers competitive pricing for international payment processing, taken in customers’ local currencies.

GoCardless also uses Wise to provide the real exchange rate so that customers get the best rate on currency conversion.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.