Why is my bank transfer delayed? 6 potential reasons

Waiting for funds to transfer can be frustrating. But as frustrating as they are, delayed payments are a common hiccup that comes part and parcel with running a business. 

And more than simply a frustration, a delayed payment can have a tangible effect. It can mean the difference between a bill getting paid on time, and a hefty fine. It can mean your staff don’t receive their wages on time. It can mean the difference between hitting your targets for that quarter or not.

The direct impacts on your cashflow are obvious.

So why are bank transfer times often so slow?

There are a few reasons, but let’s first look at what’s actually happening during your bank to bank transfer, and the time it typically should take.

How long does it take for money to transfer between banks?

There is no set or defined timeframe in which a bank transfer should occur. These days a bank transfer can take anywhere from one to ten business days.

And a business day, as it’s generally understood, isn’t a vague idea. It actually has a legal definition.

According to the New Zealand Government Procurement, business days “exclude Saturdays and Sundays, New Zealand (national) public holidays and all days between Boxing Day and the day after New Year’s Day”. So any day on which business would typically occur. 

Based on this, you can already start to see one reason why your bank transfer time feels slow, or you’re experiencing a delayed payment.

So let's look at some of the more surprising reasons that have an impact on your bank transfer times, and how this can result in a delayed payment for your business.

So let’s look at some of the more surprising reasons that have an impact on your bank transfer times, how this can result in a delayed payment for your business, and ways to lessen the negative impact.

1. Global events

Unsurprisingly, global events (especially geo-political or environmental) affect international bank-to-bank transfer times. Take the pandemic for example.

While your bank will likely be providing regular updates as the situation evolves, most banks have advised their clients to expect delays. These can be due to limited staff, staff undergoing alternative working arrangements, or unforeseen staffing interruptions.

Now, this isn’t by any means a normal reason that your international bank payment is delayed, but it’s definitely something to take into account in a decidedly not normal time.

2. Bank holidays, even those in other countries

Banks work under the legal definition of business days, which means they close for public holidays and shut up shop over Christmas. So, as bank transfer times only count business days towards your transfer period, these holiday times don’t count towards this, even if you started the transfer prior to the day they’re closed.

You also need to be aware of the country to which you’re sending your funds, and any holidays they may celebrate. Golden Week, for example, is celebrated in both China and Japan and is a series of public holidays contained within a one-week period. So if you transfer money to either of these countries during this time, you can expect a delayed payment.

3. You transferred money over the weekend — but not your weekend

It pays to be aware of the working week in the country to which you’re transferring your funds.

As per the business day rule, bank transfers made over the weekend usually won’t begin their transfer until the next business day. This is usually a Monday, but what’s considered a weekend also depends on what that country considers a working week.

For example, the United Arab Emirates operate on a Sunday to Thursday working week, with their weekend over Friday and Saturday. Some Malaysians also work to this timeframe, while others operate on a more recognisable Monday to Friday.

4. Different time zones and bank cut-offs

When making a bank transfer, the varied times are often at the mercy of any number of human factors. But you’ve also got the difference in time zones.

Starting an international transfer at the end of the working day will add time to your transfer, as it’s typically sent from the next business day.

For our Asian business partners, time zones don’t present too big a problem. But for countries with a significant time zone difference, such as the UK and the USA, this becomes a much bigger issue.

For example, a payment processed at midday in New Zealand is the equivalent of 6:00pm in New York the day before. So when calculating business days, you need to factor in the time on the receiving end of your transfer.

5. Your bank transfer is actually made via the SWIFT network

The SWIFT network is the banking infrastructure that underpins your international transfers.

Now, this network doesn’t transfer your money, per se. It transfers your information. The information of your transaction is transferred in the form of a payment order, from bank to bank, until it arrives at its desired account. These payments usually pass through a number of different intermediary banks before arriving at your destination, which is a major cause in a delayed payment.

But how long a SWIFT payment takes can vary, taking anywhere from 24-48 hours, up to five business days. Learn more about SWIFT. 

6. There’s sometimes just…missing paperwork

Sometimes you just don’t know what’s happening on the other end of your transfer. Different countries have different money transfer regulations, tax rules, and additional documentation that needs to be filled out. China, for example, requires proof that the source of the money is legal, and it’s been legally obtained through means of income.

This paperwork will be done by a human, which means — as we said above — it’s at the mercy of human error. So your transfer documentation might be all okay on your end, but in the intervening process there’s a form that isn’t filled out correctly, or it just… gets lost.

We’re not saying this is an expected occurrence, but it’s still something that can occur. Missing documentation can lead to significant delays in your payments, so it’s something to factor in if time is of the essence.

3 Alternative ways to try and avoid bank delays

1. Leverage Local Payment Networks: Instead of relying on international wire transfers (such as SWIFT) that can be delayed by bank cut-offs, global events and bank holidays, consider using a financial service that operates with local payment networks in multiple countries. Airwallex's extensive local licences and infrastructural coverage ensure faster processing times by avoiding typical cross-border transfer delays.

2. Use Digital Payment Platforms: To circumvent the delays caused by weekends and bank cut-offs, digital payment platforms like Airwallex allow for instant transfers. By using a digital platform, funds are transferred efficiently without the constraints of traditional banking hours or time zones.

3. Opt for Multi-Currency Accounts: Delays often occur when converting currencies during international transfers. By using a multi-currency account, such as those offered by Airwallex, you can hold, manage, and send money in multiple currencies without needing to convert each time. This not only speeds up the transaction process but also reduces the costs associated with currency conversion. Not all multi-currency accounts are created equally though - look out for genuinely local accounts (with local bank details) versus non-local currency accounts.

Airwallex gets your payments there on time

Airwallex is designed for the speed and flexibility required in the modern business world.

While some of the examples mentioned above can’t be reduced, Airwallex’s payment system ensures that your international payments won’t be hit by any unnecessary delays.

You can make international money transfers in multiple currencies, in one business day or less. Our technology enables your payments to bypass the SWIFT network, utilising local bank transfers instead, which makes your payments faster and reduces your fees at the same time.

It’s win-win, and doesn’t rely on a system that’s over 40 years old.

And that’s not all.

Airwallex Business Account does away with fee shock completely. You can access whole FX rates that are up to 90% better than what’s offered by the banks using your multi-currency business account.

Disclaimer: This information doesn’t take into account your objectives, financial situation, or needs. Airwallex (New Zealand) Limited is registered on the NZ Financial Services Provider Register (FSPR) with number FSP1001602. All product timelines are provisional only and subject to change.