FYI - Why Do Money Transfersor Bank Transfers have a caveat of can take up to 10 working Days



  • Why Does It Take So Long To Transfer Money Between Banks

  • Why do I have to wait 10 days.


I saw this get mentioned again so I thought I'd demystify it....



Basically their is no one size fit all solution for Transfering of money it can be :

  • Due to the banking system of that country/region
  • The frequency and size of the amount - Risk Mitigation and Fraud,
  • Anti-Money Laundering  Policy
  • the transfer system used by the bank, may use the 'batch' method and submit only once or twice a day


But why is it that they can charge my cards near instantly , and yet for a refund it take days;

Or to get pay out it can be up to 10 days?



So the up to 10 days is an old standard where its actually not calendar days but weekdays aka working days.


In some cases , It's because all transfers for a bank are done in batches during the day, to an automated clearinghouse. This automated clearinghouse sorts them out and moves them to the receiving bank between two and four hours of being received. The receiving bank gets the transfer within the same day, most of the time!

This is to allow for all the various possible outcomes of the multitude of bank systems the funds may have to go through and each of their policies and processes.


e.g. funds going from a EU country to a non EU country, where there is no modern bank transfer agreement in place.



In today’s fast-paced digital world where everything is being done in a hurry and where humans increasingly want things done at a faster pace, why have the banks now been able to increase the speed of bank-bank transfers?


Risk Mitigation & Fraud Prevention

The major reason is because banks want to obey the unwritten rule of “three day good funds”: tying down transactions for three days and subjecting them to extra scrutiny to determine if they are fraudulent or not, before dispatch. So banks can be said to “deliberately” delay fund transfers so as to ensure that there is no form of fraud in the course of the transaction process.


As some bankers would readily tell you, faster payments and larger payment sizes increase the risk of fraud or losing money significantly. Banks are all about allowing people to use money with as little risk as possible.


A frequently used analogy is that of two friends. One wants to pay the other $100. Mr. A could easily decide to use $100 bill to pay in cash without thinking twice about it. But the moment the amount is increased to $1,000,000, it becomes a whole new ball game. Not only would Mr. A be very cautious about getting corresponding value for such a large amount, he would also be worried about other external factors such as getting robbed on the way or losing the bag containing the money along the way.


It is the same with banks. A bank can move $100 with little risk, but because they typically do volumes that run into millions and billions of currency units, they tend to slow things down to do all necessary checks before transferring funds. So deliberately delaying bank transfers is a method deployed by banks to lower the risk they take on such transactions.


Then there are the challenges that have become part of today’s world when it comes to illicit financial flows. No bank wants to be accused of helping move money for terrorists or drug dealers. The need to perform due diligence checks on especially heavy transactions is another reason why banks delay wire transfers.

Following the Process

That we live in an era where instant gratification is almost seen as a right does not automatically mean that processes must be bypassed so as to sacrifice quality controls on the platform of speed. No matter how fast a brain surgeon wants to get his work done, there are processes to be followed in performing neurosurgical procedures which ABSOLUTELY cannot be bypassed. So in this instance, speed is not an advantage.

Bankers have also argued that anything that has to do with moving money comes with a lot of risk. Therefore, internal control processes which have been instituted to make sure things work smoothly in an environment of low risk cannot be sidestepped and must be followed to the letter. This may come with a few delays, but it is well worth it at the end.

Extra Trading Capital

However, it is also a widely held view that these delays may have nothing to do with fraud prevention, and are actually all about making some extra money from the funds to be transferred. It is well known that banks engage in many forms of financial trading, including forex trading. Indeed, they are the biggest players in the forex market. Some banks use forex for settlement of the requests of their clients, while some actively trade with it. Price movements of 0.9% and more on some volatile trading days are not uncommon, and these are mostly generated by the trading volume of banks. So holding on to transfer funds for a few days in order to trade with it and make some profit would not be such a bad idea, considering the competition for deposit funds.


I think it was since late 2017 the Eu Central bank introduced T.I.P.S. to make transfers inter-europe be near-instant and free; Of course with limitations on amount. It started with only 9 EU countries then to expand to all 31+ members.


USA uses the old Clearing house method, done in batches , but some are more modern and have faster methods, but still limitations on amount apply for Risk Mitigation, Fraud prevention.


Some Banks in EU will have agreements with USA bank to allow for faster transfers too.


Example one:

Anna wants to send her niece Rebecca, in America, a birthday present of $50. Rebecca’s account is with Bank of America. AIB has an agreement with Bank of America so we can send the message directly to Bank of America. We take the money from Anna’s account then send the message to Bank of America who will take the money from our account with them and put the money into Rebecca’s account.  

If we do not have an agreement with a particular bank, the message has to go to a bank that we do have an agreement with.. These banks are called “intermediary banks.  

Example two:

Tim is sending money to his son Brian in Australia to help buy a car. Brian’s account is with a small credit union in Sydney called Cape Breton. We do not have an agreement with this credit union so we must find a bank that does.  

We have an agreement with Commonwealth Bank of Australia and it has a relationship with Brian’s credit union branch. So we send a swift message to Commonwealth Bank of Australia and place money in their account. Commonwealth Bank then send a swift message to Cape Breton Credit Union who can then pass the money into Brian’s account.  

Due to how manual the process is, each of these banks may charge for passing along the payment.  

The charge is known as “intermediary charges” and can differ from bank to bank and range from anywhere between €0- €70 or more depending on each bank.  

There is no limit to the number of intermediary banks which can be involved in getting the money to Brian’s credit union. Each of these banks may also charge for passing on the money.



SEPA Payments

SEPA stands for Single Euro Payments Area. A SEPA payment is sent through the SEPA Scheme. The SEPA payment scheme was created to simplify international euro transfers between EU member states.

The SEPA scheme consists of the EU Member States plus Iceland, Norway, Liechtenstein, Switzerland, Monaco, San Marino and United Kingdom.  There are a number of additional SEPA zone territories, which tend to change periodically.

To make a SEPA payment you need:  

  1. The IBAN of the person you want to pay

  2. The bank to which you are sending the payment to be a member of the SEPA scheme

  3. The payment to be in euro  


Example one:

Let’s say Anna wants to send €50 to her other niece, Sarah in France. Sarah’s bank in France is a member of the SEPA scheme and Anna has her IBAN. We will take €50 from Anna’s account and put it in a central account held with the SEPA scheme. Sarah’s bank will then take the money from this central account and put it in Sarah’s account.

If you do a SEPA payment before 14:00 with us the payment will get there the same day.

If you make this payment after 14:00 the payment will get there the next business day.


There are too many scenarios to go into so for now thats the simple answer.


Kind Regards


M Adamopoulou

Thanks Barry for this detailed and very helpful payment information….


Wish you a nice evening.