By Megan Doyle
Each bank, financial institution, and even country can have different codes and conventions to ensure information is accurate and the intended beneficiary receives their funds in a timely manner. This post reviews the most commonly required types of information a small or midsize enterprise (SME) will need to know to help make sure their international wire transfer gets through.
The sender must provide information about the recipient’s account. Specifics may depend on the recipient’s bank and country, but typically include the following1:
The SWIFT network is considered the global standard for international transactions, so most countries and banks will have a unique SWIFT code. However, many European countries also use IBAN codes. Unlike SWIFT codes, IBAN codes identify individual accounts, not banks. It may be worth noting that the U.S. and Canada do not use the IBAN system, but each recognizes IBAN and can process payments in accordance with IBAN.2
In addition to the information above, many countries have unique supplementary requirements. These could include reasons why a foreigner is sending currency to the country, whether phone numbers or addresses must be included, or other specific identifiers. When sending money to a Mexican recipient, for example, an 18-digit CLABE number that identifies bank code, location, and account number may be required. Or, a Canadian Transit Number may be necessary for a recipient in Canada.3 SMEs may wish to contact the destination bank directly to clarify instructions about effectively sending or receiving an international wire transfer.
Some of the most commonly reported errors include incorrect city or country names, bank names listed without their address, incorrect SWIFT or IBAN codes, and currencies sent not matching that of the receiving bank.4
Such errors can lead to processing delays, or worse, the wrong recipient receiving funds. And, since wire transfers are typically irrevocable, both recipient and sender should be certain required information is correct. To clarify instructions and ensure accurate information, those looking to make a transaction may wish to contact the destination bank directly to clarify instructions about effectively sending or receiving an international wire transfer.
Often, a sender’s account will be debited on the same day. Wire transfers are typically processed within 3-5 business days.5 However, there are several factors that can delay transfer to the recipient. These include how many intermediary institutions are being used in the process, the currency sent, local bank holidays, and other local conditions.6,7
It may also be worth noting that several financial institutions have designated some countries as “slow-to-pay,” meaning there may be further delays. Some slow-to-pay countries include China, Mexico, India, and Switzerland.8
Foreign exchange rates are a major part of international wire transfers. Whether money is being sent to or received from the U.S., it will need to be converted to or from a foreign currency.9 When sending a wire transfer, it can be helpful to check with the bank or financial institution to be aware of how the foreign exchange rate will impact the overall cost of the transaction.
Moreover, regardless of whether an international money transfer is being sent or received, there are often associated fees issued by the financial institution and any intermediary banks.10 Some banks may charge fees ranging anywhere between $15-$75 depending on the type of transfer being made.11 Thus, recipients and senders may wish to discuss who will pay what fees. Some experts say it’s common the sender pays international transfer fees charged by the sending bank, while the recipient pays intermediary and recipient bank fees, for example.12
International wire transfers are a fast and convenient way to send money across borders, but differences among banks and countries mean that the information required can vary, and can make the process more complex. In order to avoid delays and ensure the transfer goes to the right place, senders must ensure they accurately provide the required information.
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. “Receiving an incoming international wire transfer: The basics,” Transferwise; https://transferwise.com/us/blog/how-to-receive-international-wire
2. “IBAN vs. SWIFT Code: What’s the Difference?,” Investopedia; https://www.investopedia.com/ask/answers/100214/whats-difference-between-iban-and-swift-code.asp
3. International Wire Transfer Quick Tips and FAQ, BPFCU; https://www.bpfcu.org/images/docs/international_wire_tips_faqs.pdf
4. International Wire Transfer Quick Tips and FAQ, BPFCU; https://www.bpfcu.org/images/docs/international_wire_tips_faqs.pdf
5. “How do I send a wire transfer?,” TD Bank; http://td.intelliresponse.com/accounts/index.jsp?requestType=NormalRequest&id=231&source=5&question=How
6. “How long does a wire transfer take to be processed?,” TD Bank; http://td.intelliresponse.com/accounts/index.jsp?requestType=NormalRequest&source=2&id=257&uuid=cbf763bb-62d3-11e9-ba55-27d438afea82&question=How+long+does+a+wire+transfer+take+to+be+processed
7. “Wire Transfer FAQs,” Bank of America; https://www.bankofamerica.com/deposits/wire-transfers-faqs/
8. “Slow-to-Pay Country List,” Flippa; https://support.flippa.com/hc/en-us/articles/213135957-Slow-to-Pay-Country-List
9. “Receiving an incoming international wire transfer: The basics,” Transferwise; https://transferwise.com/us/blog/how-to-receive-international-wire
10. “How do I receive a wire transfer to my account?,” TD Bank; http://td.intelliresponse.com/accounts/index.jsp?requestType=NormalRequest&source=2&id=423&uuid=cbf763bb-62d3-11e9-ba55-27d438afea82&question=How+do+I+receive+a+wire+transfer+to+my+account
11. “What Banks Charge for Wire Transfers,” Smart Asset; https://smartasset.com/checking-account/average-wire-transfer-fee
12. “Receiving an incoming international wire transfer: The basics,” Transferwise; https://transferwise.com/us/blog/how-to-receive-international-wire
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