How Long Does an IBAN Transfer Take?

IBAN transfers, which use the International Bank Account Number system, are a standard method for sending money across borders. But how long do they actually take? Let's break it down.

The quick answer: 1 to 5 working days

On average, an IBAN transfer takes between 1 to 5 working days to complete. This timeframe covers the entire process from when you initiate the transfer to when the funds become available in the recipient's account. However, this is just a general guideline. The actual time can vary significantly based on several factors, which we'll explore in depth.

An IBAN (International Bank Account Number) transfer is a type of international bank transfer that uses a standardised system to identify and facilitate cross-border payments. The IBAN is a unique identifier assigned to a bank account, consisting of a combination of letters and numbers that pinpoint the country, bank, and specific account holder. This system is widely adopted for international payments because it provides a secure and efficient way to transfer funds between banks across different countries. By using an IBAN, financial institutions can minimise errors and ensure that the money reaches the correct recipient without unnecessary delays.

IBAN transfers streamline international payments by providing a standardised format for identifying and routing transactions. When you send an international payment, your bank uses the recipient's IBAN to accurately identify their bank account and route the payment accordingly. This method is typically faster and more secure than traditional international bank transfers, as the standardised system reduces the risk of errors and fraud. By leveraging the IBAN system, international bank transfers become more reliable, ensuring that funds are transferred efficiently and securely to the intended recipient.

Countries involved

The speed of an IBAN transfer often depends on the specific countries sending and receiving the money. Transfers within the European Union, for example, are typically faster than those involving countries outside the EU. This is partly due to the standardised banking systems and regulations within the EU.

Here are some typical time frames for transfers from the UK to various countries:

UK to Spain: 2-3 working days

UK to USA: 1 to 3 working days

UK to Australia: 3-4 working days

UK to Canada: 2-3 working days

These times can vary based on the specific banks involved and other factors, but they give a general idea of what to expect.

Banks involved

Different banks have different processing times and systems for handling international wire transfers. Some banks are more efficient and have more advanced systems, allowing them to process transfers more quickly. If both the sending and receiving banks have modern, streamlined systems, the transfer might be completed faster. Additionally, having fewer intermediary banks can speed up the process, as the fewer intermediaries there are, the quicker the payment is cleared.

For example, major international banks with branches in multiple countries might be able to process transfers more quickly than smaller local banks. However, this isn't always the case, and transfer times can vary even between major banks.

Time zones

When you're sending money across different time zones, it can add extra time to the process. For instance, if you initiate a transfer from New York to Tokyo late on a New York business day, it might not start processing until the next business day in Tokyo.

This time zone difference can effectively add a day to your transfer time. To minimise this delay, it's often best to initiate transfers early in your business day, especially when sending money to countries in later time zones.

Currency conversion

If your transfer involves converting one currency to another, it can add time to the process. Some banks might need extra time to secure the best exchange rate or process the conversion.

For example, if you're sending British pounds to a euro account in Germany, the bank will need to convert the currency. This extra step can add time to the transfer process. Some banks may batch their currency conversions and only perform them at certain times of the day, which could potentially delay your transfer.

Bank holidays and weekends

Banks typically only process transfers on working days. If you initiate a transfer on a Friday afternoon, it might not start processing until Monday morning. Similarly, bank holidays in either the sending or receiving country can delay the transfer. Initiating a transfer before the bank's cut-off time can sometimes result in same-day processing, though the funds may still take longer to reach the recipient's account.

It's important to be aware of bank holidays not just in your own country but also in the recipient's country. For instance, if you're sending money from the UK to the US, remember that bank holidays often differ between these countries.

Security checks

Banks have strict security measures to prevent fraud and comply with anti-money laundering regulations. These checks can sometimes delay transfers, especially for large amounts or first-time transfers to a new recipient. The recipient's bank also plays a crucial role in verifying the transfer details and ensuring compliance with local regulations.

For example, if you're sending a large sum of money or making a transfer to a new recipient, your bank might conduct additional verification checks. They might need to confirm the source of the funds or verify the recipient's details. While these checks are crucial for security, they can add time to the transfer process.

Compliance and regulatory requirements

Financial institutions must follow strict rules set by local and international authorities to prevent financial crimes like money laundering and terrorist financing. These regulations can delay transfers but are essential for the security and integrity of the global financial system.

Banks must conduct Know Your Customer (KYC) checks to verify identities and monitor transactions for suspicious activity. They also check sanctions and blacklists to avoid dealings with sanctioned parties and comply with Anti-Money Laundering (AML) policies, reporting suspicious activity to authorities.

Incorrect details

If any of the details you provide for the transfer are incorrect – like the IBAN number or the recipient's name – it can cause significant delays. The transfer might be returned to your account, and you'll need to start the process again.

Even a small error, like a mistyped letter in the IBAN or the recipient's name, can cause problems. Banks need to ensure they're sending money to the correct recipient so they'll flag any discrepancies. This can lead to the transfer being delayed or even returned.

To understand why IBAN transfers take the time they do, it's helpful to break down the process step by step:

Initiation: You start the transfer with your bank by providing the necessary details, including the recipient's IBAN. This can be done online or at a bank branch.

Verification: Your bank checks the information and ensures you have sufficient funds. They confirm all fields are correct and the IBAN follows the correct format.

Processing: The bank processes your request, deducting funds from your account. The money might leave your account but hasn't reached the recipient yet.

SWIFT Network: Most international transfers use the SWIFT network for bank communication. Your bank sends a message to the recipient's bank with all transfer details.

Intermediary Banks: Sometimes, money passes through intermediary banks, especially when countries lack a direct banking relationship. Each bank processes the transfer, adding time.

Recipient's Bank Processing: Once the recipient's bank gets the transfer, they credit the recipient's account after verifying details and ensuring regulatory compliance.

Funds Available: The recipient accesses the funds based on their bank's policy.

Each of these steps takes time, which contributes to the overall duration of the transfer. The process might seem simple, but it involves multiple checks and balances to ensure the security and accuracy of the transaction.

How to speed up your IBAN transfer

While you can't control all aspects of the transfer process, there are steps you can take to help ensure your transfer goes as quickly as possible:

Double-check all details.

Send during business hours.

Consider the receiving country's time zone.

Be aware of holidays.

For urgent transfers, ask your bank if they offer any expedited services.

Troubleshooting IBAN transfers with intermediary banks

Despite your best efforts, sometimes IBAN transfers don't go as smoothly as planned. Here are some common issues and how to address them:

Transfer delays: If your transfer is taking longer than expected, contact your bank. They can track the transfer and provide updates. Sometimes, they might need additional information from you to complete the transfer.

Rejected transfers: If your transfer is rejected, it's usually due to incorrect information. Double-check all the details and try again. If the problem persists, contact your bank for assistance.

Lost transfers: While rare, transfers can sometimes get "lost" in the system. If your transfer hasn't arrived after 5 business days, contact your bank immediately. They can initiate a trace on the transfer.

Unexpected fees: Sometimes, intermediary banks may deduct fees from your transfer amount. To avoid this, you can specify that you'll pay all fees, including those of intermediary banks.

Exchange rate issues: If you're unhappy with the exchange rate applied to your transfer, ask your bank about their rates and policies. For future transfers, you might want to consider using a service that allows you to lock in an exchange rate in advance.

Remember, your bank should be your first point of contact for any issues with your IBAN transfer. They have the tools and information to track your transfer and resolve most problems.

While IBAN transfers are a common method for sending money internationally, they're not the only option. Here's how they compare to some other popular methods:

Wire transfers: Similar to IBAN transfers, but can be used in countries that don't use the IBAN system. They often have higher fees and similar processing times to IBAN transfers. Using an existing bank account for international bank payments can simplify the process and avoid the need to open new accounts.

Online money transfer services: Companies like Wise or PayPal often offer faster transfer times and lower fees than traditional bank transfers. However, they may have lower transfer limits and might not be available in all countries. These services highlight the efficiency and functionality of international money transfers using fintech solutions like Fyorin.

Cryptocurrency transfers: These can be nearly instantaneous and have low fees, but they come with their own set of risks and complications, including price volatility and the need for both parties to use cryptocurrency. Despite their speed, traditional methods like wire transfers and international bank payments are still widely used.

International money orders: These are slower than electronic transfers but can be a good option for sending money to someone without a bank account. Long international bank transfers can sometimes be delayed due to compliance checks and other complications.

Prepaid debit cards: Some services allow you to send money to a prepaid debit card, which the recipient can then use to withdraw cash or make purchases.

Each method has its pros and cons in terms of speed, cost, availability, and ease of use. The best choice depends on your specific needs, the amount you're sending, and where you're sending it.

International bank transfers rely on a network of correspondent banks and the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network to facilitate the movement of funds across borders. Correspondent banks are financial institutions that have established relationships with each other, enabling them to process international payments on behalf of their customers. The SWIFT network is a secure messaging system that banks use to communicate and exchange financial messages, including payment instructions.

When you initiate an international payment, your bank sends payment instructions to the recipient's bank through the SWIFT network. This message includes all the necessary details for the transfer. The payment is then processed and settled through a network of correspondent banks. Each intermediary bank involved in the process adds a layer of verification and security, which can contribute to the overall time it takes for the transfer to be completed. Depending on the banks involved, the payment method, and the countries of origin and destination, this process can take several days. Understanding this network helps explain why international bank transfers, including IBAN transfers, can sometimes take longer than expected.

IBAN transfers typically take 1 to 5 working days, but this can vary based on several factors. By understanding these factors and following best practices, you can help ensure your international transfers go as smoothly and quickly as possible.

Remember, while speed is important, security is crucial in international banking. The time taken for IBAN transfers often reflects the careful processes put in place to protect your money as it moves across borders. For businesses seeking faster alternatives, modern fintech platforms like Fyorin offer streamlined solutions for managing international payments across multiple currencies and payment rails, all from a single platform. Get in touch to learn more.

Whether you choose traditional IBAN transfers or modern payment solutions, the key is selecting an approach that matches your specific needs while maintaining the security and reliability your business requires.