6 Surprising Reasons Behind Why Your Bank Transfer Is Delayed

“How long does a bank transfer take?” It’s a commonly asked question, especially when we’re waiting for funds to transfer.

Of course, nobody enjoys delayed payments but the honest truth is that they are simply part and parcel of running a business. 

Of course, beyond our frustration, a delayed payment can have a tangible effect. It can be the difference between paying a bill on time and a hefty fine for late payment. It can mean your staff not receiving their pay on time. It can be the difference between whether or not you hit your targets for the quarter.

The direct impacts on your cash flow are crystal clear.

So why are bank transfer times so slow?

There are many reasons but first, let’s look at what’s actually happening during your bank-to-bank transfer, and the time it typically takes.

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

Interestingly, there is no set or defined timeframe in which a bank transfer should occur. Today, a bank transfer takes anything between one to 10 business days.

A “business day”, as it’s generally understood, isn’t something to throw around lightly; it actually has a legal and binding definition.

According to the Singapore’s Banking Act 1970, a business day is defined as: “any calendar day other than a Saturday, Sunday, public holiday or bank holiday.” Basically, it’s any day other than the ones stated above. 

You can begin to see why your bank transfer times feel slow, or that you’re experiencing a delayed payment.

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

1. Global events, like worldwide pandemics

COVID-19 is affecting international bank-to-bank transfer times too. 

Even though your bank is likely to provide regular updates as the situation changes, most banks have advised their clients to expect delays. Reasons range from limited staff, staff undergoing alternative working arrangements, or unforeseen staffing interruptions. 

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 uniquely challenging time.

2. Bank holidays in other countries

Banks work under the legal definition of business days, which means they close for public holidays too (yes, even Christmas). So, as bank transfer times only count business days towards your transfer period, holidays don’t count towards this. It’s the same, even if you started the transfer the day before they close for the holiday.

You also need to be aware of the country to which you’re sending your funds, and any holidays they may celebrate. For example, Golden Week, is observed in both China and Japan. This 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

Attention to detail comes in handy here, especially when the work week in the country you’re transferring your funds overlaps with yours. 

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 the country in question defines a working week as.

For example, the United Arab Emirates operates 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

The time in which it takes to make a bank transfer is at the mercy of a surprising number of human factors. But you also need to factor in 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 on the next business day.

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

For example, a payment processed at 12:00pm in Singapore is the equivalent of 11:00pm 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 payment network is the banking infrastructure that underpins your international transfers.

The network doesn’t transfer your money—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. You can see why this can cause a delayed payment.

How long a SWIFT payment takes can vary anywhere from 24-48 hours, up to five business days. 

6. Sometimes paperwork just goes missing

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. And this means: human error. You could have done everything right, filling up your transfer documentation down to a tee. But someone else involved in the process fills out a form incorrectly. Or… the paperwork just goes missing.

It’s not a regular occurrence but it’s still something to consider. Missing documentation can lead to significant delays in your payments, so factor it in if time is of the essence.

Airwallex gets your payments there on time

You’ve read all about why bank transfers get delayed. So why not use Airwallex instead? Airwallex is designed for the speed and flexibility required in the modern business world.

Even though some of the aforementioned examples simply can’t be helped, 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.

Add up to 3% back to your margins with a business account built to go global

Airwallex’s multi-currency business account does away with fee shock completely. You pay no monthly fees on your foreign currency account, ever, and can access market-leading FX rates.

Related articles about business transfers:

• What is a wire transfer?

• Why is your bank transfer delayed?

• What are foreign transaction fees and how to avoid them?

• How to save on international money transfer fees?