How Long Does a Money Transfer Take?
Once the near-exclusive domain of banks and traditional financial institutions, money transfers are now available through a long and fast-growing list of alternative fintech providers. These companies offer every bit as much reliability and security as banks, often while delivering better exchange rates and lower transaction fees.
However, as you research your options, you’ll notice that transaction times vary from one company to the next and are often given as a range rather than as a fixed duration. For instance, companies commonly say their transfers take “one to four business days,” which is the standard for most transactions that deposit funds into recipients’ bank accounts. Cash pickup and card-to-card transactions are usually faster.
In this guide, we’ll look at the factors that influence money transfer transaction times so you have a clearer idea of how they work and what you can expect the next time you send money to an international recipient.
Factors That Influence Money Transfer Transaction Times
Six main factors determine how long it will take your international money transfer to reach its intended recipient. They include:
Factor #1: Your chosen payment method
Money transfer providers usually support payment methods including online banking, credit cards, and debit cards. Some also support cash and digital wallet payments, and cryptocurrency payments may also be on the horizon. By and large, these transactions are electronic and take place over telecommunications networks, meaning they are usually completed very quickly. However, others, such as wire transfers, take more time.
So, why would you want to use a wire transfer to send money to a third-party transfer provider when you could just wire it straight to the recipient from your bank? There are several reasons:
You will almost always get a better exchange rate from a specialized money transfer provider
Your recipient may not have a bank account, or may not want to receive funds in their bank account for various reasons
You may wish to take advantage of other special services and features uniquely available through a specialized provider
Factor #2: Origin and destination currencies
Major currency pairs are heavily traded on global foreign exchange markets and can readily be swapped for one another. However, some currencies are available in lower volumes, while some particularly rare currencies may take time to find and purchase. Your transaction cannot be processed until the service provider actually has funds in the destination currency on hand, so your transfer can take longer if you are dealing in obscure or exotic currencies.
Factor #3: The day of the week
If you initiate your transaction during normal weekday business hours, it will almost always be completed faster than it would if you did it on a weekend or bank holiday. Fridays are also tricky, as requests sometimes go into queues and the originating or destination bank may not clear or process the transaction until the following Monday.
Factor #4: Time of day
You should also account for the time of day when you’re initiating a new money transfer. If you confirm your order near the end of regular banking hours, it may not actually process until the morning of the next business day.
All banks have specific, inflexible guidelines that govern the way they handle incoming transfer requests. They must meet internal cutoff times, or they will not be processed until the next day. These requests include important details like transfer instructions, payment confirmations, and other administrative details, so they usually need to pass human eyes before proceeding.
Factor #5: Time zone differences
Given the nature of international financial transactions, time zone differences also play a critical role in the speed of a given transfer. For instance, if you are in Europe and you send a transfer to the United States on a weekday morning, the European bank will be open, but the recipient’s U.S. bank will be closed. Thus, the transaction will go into pending status, and will likely remain there until the receiving institution across the ocean is open.
Because most third-party money transfers still involve retail banks at both the sender and recipient ends, time zone differences can add a day or so to the completion time. This is due to discrepancies and lags in their respective operating hours.
Factor #6: Regulatory oversights and compliance obligations
Depending on where your transfer is headed, this can be the single most impactful factor in determining how long it will take. All countries have regulatory bodies and administrative oversights in place to govern incoming international financial transactions. Governments need to monitor financial activity to ensure all transactions comply with both local and international laws.
Money transfers are no different. They are subjected to scrutiny just like every other transnational financial transaction. Some countries are faster to clear funds for release than others, and in some cases, the speed at which your funds are okayed for delivery also depends on the country you were in when you sent the transfer.
There isn’t a whole lot you, your bank, or your money transfer provider can do to speed this process up. It’s a necessary aspect of using transfer services to conduct transactions.
Tips for Reducing Money Transfer Transaction Times
Some of the factors that influence the amount of time a transfer takes can be influenced by your actions, while others cannot. Here are some of the things you can do to make sure your transaction completes as quickly as possible:
- Pay for your transfer through your online banking, with your credit or debit card, or with cash (if possible)
- Initiate your transfer early in the week (Mondays and Tuesdays are best)
- Avoid sending a new transfer on a Friday, weekend, or bank holiday if possible
- Consider time zone differences and try to arrange your transaction during a time when banks are open where you are and where your recipient is
- Research competing providers to see which provides the fastest and most efficient service in your country or region
To these ends, a good way to maximize speed is to use a money transfer service. These companies operate more efficiently than banks since cross-border transfers are all they do. They’re also known for offering superior exchange rates and lower fees.