How to Develop a Global Money Transfer Checklist
September 7, 2017
Veem is here to help simplify global money transfers for your small business. Our simple, user-friendly process will change the way you think about global payments. Our innovative approach to payment solutions for small businesses will save you time, money, and headaches.
It may surprise you to learn that the process of transferring money from one bank to another is not all that different today than it was decades ago.
Every payment made passes through the hands of multiple parties as it makes its way from sender to recipient, and every pair of hands expects payment for their role in the process. As you can imagine, this can get very complicated—and expensive—very quickly. Here’s a quick overview of how it all works.
There are three main players:
The original clearing houses allowed banks to stop taking checks to multiple institutions and instead allowed them to take all of their checks to one place for distribution. The digital world brought with it the Automated Clearing House (ACH); transactions are handled either by the Federal Reserve or a private company regulated by the Federal Reserve. International money transfers involve the Clearing House Interbank Payments System (CHIPS). The largest private-sector U.S. dollar-funds transfer system in the world is responsible for over 95% of international U.S. transfers.
SWIFT (Society for Worldwide Interbank Financial Telecommunication)
Many people believe that SWIFT is a sort of international clearing house, but its actual function is to transmit messages between banks so the banks can transfer money.
Currency exchange can take place either on the day your transaction is initiated, or on the day it’s received by the recipient.
The process from initiation of payment through the applicable clearing house, SWIFT, and currency exchange and finally to your recipient takes an average of between three to five days when everything goes smoothly. When your recipient hasn’t received his money in a timely fashion and contacts you to find out why, a process that can be very frustrating begins.
Your first thought is probably to call your bank, but they won’t take responsibility because all they did was send the transaction to the clearing house. So they contact SWIFT, who may not respond even after multiple calls. Your recipient may call SWIFT as well but probably won’t have any better results than you did. Because so many people touch the transaction on its journey from you to the recipient, it’s hard to pinpoint where the hitch occurred. This scenario usually ends with a cancellation of the original transaction and an initiation of a new one.
In the meantime, if the bank isn’t able to reclaim the funds quickly, they have to launch an investigation, but they don’t have to contact you with their findings for 20 days. That’s 20 days you could be without cash you need to run your business. In addition to time lost trying to pinpoint the source of the failed payment and being in limbo for up to 20 days as the bank investigates, a botched payment puts your relationship with your supplier in jeopardy.
Individual Tasks Involved in Making a Global Transfer Through Your Bank
You can initiate a global wire transfer through your bank in person or online. These are the tasks required:
- Provide the recipient’s banking information, including:
- the name and address of their bank
- the recipient’s name, address, and type of account (checking account, etc.)
- the recipient’s account number or International Bank Account Number (IBAN)
- the recipient bank’s SWIFT code
- Specify the currency and amount of the transfer
- Pay your bank’s fee for the transfer
- Find out how long it will take for the transfer to complete
- Check the status of the transfer when the appropriate amount of time (from the prior step) has passed.
Veem’s Global Transfer Process
At Veem, sending global payments is as easy as 1-2-3.
- Set up your profile. Just provide your name, business, and email address and link to your bank account.
- Tell us how much you want to send and in what denomination. We can send to 60 countries, and we don’t charge a fee. We just need an email address for the recipient.
- The recipient will need to confirm their bank details and business information the first time we send them a wire transfer from you.
By using Veem instead of your bank, you avoid exorbitant fees and cut out the middle man. SWIFT isn’t involved, so there’s no need to acquire your recipient’s SWIFT code. There’s no reason to get their account number or any other information about their bank account.
As a small business owner, you need a variety of money tools. In our increasingly global business environment, global transfers are among the vital payment options for small businesses. At Veem, we understand this—and have removed all the extra time-consuming steps that are involved in traditional global wire transfers. Our process is simpler, and your experience will be smoother.