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Why bank transfers might be delayed

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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 editedMar 20222 min read

In most cases, domestic bank transfers using the ACH system clear within three business days. For international wire transfers, the window of normality might extend to five working days. However, sometimes there is a bank transfer delay. This can have a negative knock-on effect to your business, delaying your own bill payments and potentially impacting cash flow. What causes this payment delay, and what should you do when a bank payment is not received?

1. Weekends and holidays

One of the most common reasons for a bank transfer delay is a weekend or holiday. Transfers are typically processed during working days and hours, so if your sender has made a payment on Friday afternoon, it won’t be processed until Monday morning. This automatically tacks on two days to the processing time. If you’re expecting a wire transfer during holidays, plan for it and factor in the extra processing time needed so that it won’t impact your cash flow.

It’s even more important to keep the holiday aspect in mind when sending and receiving an international bank payment. Delays in international wire transfers are often due to holidays in the country of their origin. Did you know that the weekend doesn’t carry the same definition in every country? For example, if you’re waiting for a payment originating in the United Arab Emirates it’s important to know that the country’s definition of the working week runs from Sunday to Thursday.

2. Paperwork errors

Like other types of payment processing issues, another root cause of bank transfer delays is manual error. If even a single digit of your bank account or routing number is incorrect, this can impact the payment transfer time while the bank sorts it out. Delays in international wire transfers might also be chalked up to a paperwork issue, particularly when additional documentation is required. Large cross-border transactions might require extra paperwork due to anti-fraud and tax regulations – and unfortunately, sometimes it goes missing.

3. Differences in time zones

Delayed wire transfer during holidays are common, but differences in time zones can also be a weekday culprit. For example, a NYC-based business waiting for payment coming from Tokyo should factor in the 14-hour time difference. If a payment is processed at noon on Friday in Japan, this is the equivalent of 10:00 pm on Thursday evening back in New York. Keep these differences in mind when working out business days for processing.

4. Missed bank cut-off times

Individual bank cut-off times go hand in hand with differences in time zones to muddy the waters. Normally, banks will process transfers until the end of the working day. However, some will have an earlier cut-off time. After this set time, transfer requests placed that day won’t go out until the following business day. This can be frustrating, but it’s often a reason for your payment delay.

What to do when a bank payment is not received?

Whether you’re waiting for a domestic or international bank payment, when the average processing time of 3-5 business days has passed it’s best to act and prevent further delay. Contact your payer to verify that they have sent payment and ask for proof of submission if needed. You should also contact your bank provider to find out if there are any issues related to your payment. This gives you a chance to correct any missing details while giving you an idea of when you will receive the transfer.

GoCardless helps cut down on late and missing payments by using pull-based Direct Debit. This puts the merchant in charge of the amount and timing of the payment, so you can avoid chasing up on missing transfers.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.