How to Receive Money from Overseas & Factors Influencing Transfer Time

How to Receive Money from Overseas & Factors Influencing Transfer Time.

How to receive money from overseas: In a time of technological advancement, consumers are used to receiving everything instantly. Payments are no exception. If you are making an overseas money transfer you will likely want to know how long it’s going to take. Unfortunately, there is no definitive answer to this one.

You might think that international money transfers are mainly handled by the person sending the money, but there are a few things you should keep in mind before collecting funds transferred from overseas.

In this guide, we’ll give you a general rundown of all the important things you need to know when receiving money from overseas.

What are the different ways to receive money from overseas?

Since you’re on the receiving end, the method of transferring money internationally and the choice of provider may be out of your hands. But even so, it’s useful to know a bit about the different ways of receiving money from overseas.

PayPal

paypal

Friends, family, or even business associates can make payments into your PayPal account from theirs. It’s an easy, secure way to transfer money from person to person, and fees are based on a percentage of your transfer amount. PayPal is great for small transfers, up to about $200.

Just remember, for PayPal to be a viable option, both the sender and the receiver need to have an account.

IMT through your bank account

Your sender can use either their regular bank or an IMT specialist to transfer money overseas, but remember that you’ll need to nominate a bank account to receive the funds.

The better the deal your sender gets, the more money you’ll receive, so it’s worth doing some research so you get the most bang for your buck.

What affects how much money I receive?

What affects how much money I receive?

Exchange rate

The exchange rate is probably the main reason why there’s a difference between the funds that were sent and what you received. It can work in your favor (for example, transferring US dollars to Aussie dollars will mean you’ll have the extra cash) or it can work against you, as in the example above.

It’s important to get the best possible exchange rate, especially if you’re transferring large amounts because even small differences can add up to hundreds of dollars.

Fees

If you’ve taken into account the exchange rate and still think the transfer amount is not right, you might have been charged a transfer fee. Your sender usually pays fees to do the IMT, but often you’ll also be hit with a charge for your bank to receive it.

Why aren’t international transfers instantaneous?

It’s 2017 and most financial transactions are now completed online. So why is it that transferring finances internationally isn’t an instantaneous process? The simple answer is a fraud. With large volumes of payments to be processed through larger sending banks, necessary regulatory procedures mean that there are often delays with the expediting funds from the sending bank’s side.

Transfers move in a series of steps that are purposely slowed down to reduce the possibility of fraud. Each country has rules surrounding the movement of money through its international borders.

Sometimes the banks receiving the transfer need to confirm the information and funds received as a fraud protection measure. While this is an important compliance measure and in the best interest of all parties transferring and receiving international money transfers, incoming funds may not be accessed by the beneficiary for another one or two days after the funds reach the receiving bank. Larger sums are obviously subject to more stringent, and as a result, lengthy controls.

How long will it take for me to receive money from overseas?

An international money transfer can take 1-5 days to be processed, depending on where the money is being sent to and from, and the provider doing the transfer.

Once it’s processed on the sender’s end, your bank should generally be able to put the deposit into your account on the same business day they receive it.

Reasons your IMT might be delayed

If there is a delay in your money being transferred from overseas, there could be several reasons why including:

  • If the funds were sent in a foreign currency, the bank may not have received specific instructions about converting it for you. This could cause delays.
  • Security reasons. Especially when sending large amounts of money, there might be concerns about fraud or money laundering.
  • If the funds aren’t available from the sending bank account. This may particularly be a problem if your sender has set up regular payments, and forgot to check that the nominated bank account has a high enough balance to complete the transfer.
  • Incorrect details. If your sender has provided incorrect details for the IMT, it could cause delays, cancellation of the transfer,or even,  unfortunately, that the money has been sent to the wrong place.

Other factors influencing transfer time

factors influencing money transfer time

The SWIFT international payment network is one of the largest financial messaging systems in the world. The majority of cross border payments outside of the Eurozone are sent via SWIFT which uses BIC and IBAN to identify and apply funds to bank accounts worldwide.

The details of the bank account to which funds are being transferred must be correct if speed is of the essence for an international money transfer. All too often, funds are delayed in the international banking system due to incorrect account details preventing funds from being applied to the beneficiary account. This can potentially delay a transfer by weeks due to the recall and re-sending of funds with amended correct details.

Let’s examine the most common factors that play a role in how long an international bank transfer takes:

Payment method

The most common method used to transfer money internationally to a beneficiary overseas is through wire transfer. These can also be more expensive (varies by bank) than other options but they can be the quickest option depending on factors like currency and destination. When making non-urgent payments in Euros within the Eurozone, SEPA payments are a cost effective method of transferring money.

Currency used

Popular global currencies like the Euro, Sterling and the US Dollar are regularly traded on foreign exchange markets. This means that transfers in these currencies will normally be completed as quickly as possible. Transferring rare or exotic currencies may take longer to reach your beneficiary.

Weekends and holidays

If you initiate a payment late on a Friday afternoon you will need to wait until the following Monday before the payment is processed. Naturally a weekend adds a further 2 days to the process and bank holidays can extend this further to 3 days when payments are initiated on a Friday afternoon. When determining the length of time an international transfer takes from initiation to receipt of funds, the timeframe is always measured in working or business days (omitting bank holidays and weekends)

Cut off times

Being aware of bank cut-off times is important in terms of assessing how long it will take for receipt of your transfer request and for your transfer to be initiated. All banks have a cut off time each day for receipt of payment and transfer instructions, so the earlier a transfer instruction is made the sooner the payment will be processed. Requests processed at the end of the business day will not be sent until the following day adding an extra day to the transfer process. Always be aware of bank cut off times especially when payments are urgent.

Time zone

You should expect a delay if there is a significant gap between the time zones of the countries between which funds are being transferred. If for example, a payment is initiated in Ireland to be sent to an account at a bank in the US, the payment will be pending until the US bank opens.

What is the role of an intermediary bank in the transfer process?

An intermediary bank is required when sending a payment in a currency that is not the domestic currency of the destination that the funds are being sent to. International wire transfers often occur between banks that do not have an established financial relationship. When agreements are not in place between the bank sending the wire transfer and the bank receiving it, a correspondent bank must act as an intermediary.

For example, a bank in Dublin that has received instructions to wire funds to a bank in Thailand cannot wire funds directly without a working relationship with the receiving bank. When intermediary banks are used, the indirect nature of the transfer can sometimes, (but not always) mean that there is a delay in receipt of the funds being transferred.

What details do I need to receive money from overseas?

To get your hands on the funds, you’ll need to give the sender a few details, including:

  • The name of your bank
  • Your BSB
  • The BIC/SWIFT CODE – this is an international banking code that will help identify your bank
  • Your account number
  • Your account name

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