Possible Reasons Why Your Bank Transfer is Delayed

We live in a world of instant gratification, and having access to the internet usually means we can get whatever we want within a very short space of time. Except when it comes to money. Or more specifically, when we’re waiting for a bank transfer. Delays in the time money takes to reach your account seem almost baked in, but do they have to be? We take a look at some of the reasons why international payments can seem sluggish, and what you can do to avoid them.

Why is my bank transfer delayed?

It’s hard to find someone who hasn’t experienced the frustration of a delayed international payment. Either you’re left waiting to receive money from clients or someone you’ve sent money to is asking where it is. It can range from a mild irritation to the  inability to operate or a damaged business relationship. You’re often left feeling that there’s nothing you can do about it, so why do cross-border payment delays happen?

There are multiple reasons why international bank transfer times seem to take too long, ranging from technology infrastructure issues to operational failings. Reasons why your pending payment is still processing can include:

• Your money might have been sent on a weekend or public holiday when legacy bank operations are closed and no processing is being done.
• The payment could be subject to additional processing checks, or additional information has been requested and is still pending.
• Incorrect recipient details will delay payment.
• There’s an incompatibility issue between the sender’s and the recipient’s bank or payment scheme.

What is an acceptable timeframe for international bank transfer times?

The payment processing time depends upon the type of payment being made. If you’re making a payment using a digital payment platform like Payoneer and the payee’s account is on the same platform, you can expect payment to be quick. However, when it comes to legacy bank transfers, even when they run smoothly, it can take up to 72 hours for funds to move from one bank account to another. Another factor may be currency exchange processing, as certain local currencies may require additional processing time compared to major currencies.

Legacy banking systems vs fintech digital payment platforms: Reasons for delayed payment

Bank transfer not received? You wouldn’t be alone if you’ve noticed that legacy international bank transfer times are much slower than when you transfer money using a digital payment platform (DPP) such as Payoneer. It’s easy to conclude that everything digital is automatically quicker and better,, but there are some genuine reasons why legacy banking systems struggle to process international payments as quickly as their fintech competitors.

Legacy international bank transfer times using systems such as ACH or Swift are slower for some of the following reasons:

• Legacy banking’s use of batch processing: Processing payments in batches creates bottlenecks as transactions are placed in groups to be processed at regular fixed intervals. DPPs process individual transactions as soon as they come in, avoiding this delay.
• Use of intermediary banks: When a transaction has to pass through several intermediary banks on its way to your account, each one can add to the payment processing time. This happens with SWIFT transfers, but can be avoided by using DPPs.
• Out of date technology: Legacy banks are often still using dinosaur technology – ancient mainframes which utilize common business-oriented language (COBOL) rather than providing real-time processing.
• Fund clearing: Legacy banking systems may not clear funds until the money is actually available to them. DPPs, on the other hand, will often clear instantaneously, using their own funds even if the backend settles later.
• Lack of automation: Legacy banks generally still rely on manual interventions and compliance checks for AML and KYC regulations. DPPs have automated these tasks to allow for quicker clearance while still offering the same high levels of security to their customers.
• DPPs employ better infrastructure: Fintechs have created digital payment platforms without all the baggage of the legacy banking system’s out-of-date architecture. They are cloud-native and can handle high volumes of payments instantaneously, so users don’t experience international wire transfer delays.

How to avoid delays in cross-border and domestic payments

If you’ve read this far, you probably already know the answer – by using a digital payment platform such as Payoneer, you can avoid international payment delays and unlock global growth. Whether you’re waiting to get paid by clients, want to take advantage of local receiving accounts to manage your FX expenses, or need to set up an easy ecommerce payment solution for your online shop, Payoneer is the smart choice for making secure business payments. And as well as being quicker than legacy banking, DPPs like Payoneer usually offer better-value pricing as well.