Why is my bank transfer delayed? 6 potential reasons

Whether it’s a payment you’re making or expecting to receive, delayed payments can cause a lot of exasperation, especially around the holiday season. Unfortunately, this issue is a common hiccup that comes with the territory of running a business.

Even more than simply being an annoyance, a delayed payment can have an actual impact on your business, both monetarily and brand-wise. From not being able to make bill payments on time and getting hit with a fee, to being unable to process payroll and get your employees their paychecks, the impact is obvious. It can also negatively affect your business’s reputation.

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 if we’re going by standards.

How long do bank transfers normally take?

Although having a set timeframe for bank transfers would make running a business a lot easier, there is unfortunately no globally defined timeframe in which a transfer should occur. These days, a bank transfer can take anywhere from one to 10 business days.

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

The US Code of Federal Regulations (CFR) defines a business day in section 31 C.F.R. § 802.201 as: “Monday through Friday, except the legal public holidays specified in 5 U.S.C. 6103, any day declared to be a holiday by federal statute or executive order, or any day with respect to which the U.S. Office of Personnel Management has announced that Federal agencies in the Washington, DC, area are closed.” 

So, at least in the United States, a business day is considered 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. Public, bank, and government holidays might be stalling its progress.

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.

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

Like we mentioned earlier, banks work under the legal definition of business days, which means they close for public holidays such as Christmas Eve and Christmas Day. 

As bank transfer times only count business days toward your transfer period, these holiday times don’t count toward 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 as it moves forward on business days only.

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 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.

Even though a Sunday might be considered a weekend to folks in the US, other countries might not see it that way.

For example, while US workers see the work-week as Monday through Friday, that’s not the case around the globe. 

Afghanistan recognizes the work week as Saturday through Wednesday, and the United Arab Emirates operate on a Sunday to Thursday working week, with their weekend taking place over Friday and Saturday. 

4. Different time zones and bank cut-offs

Money transfers can be at the mercy of any number of human factors along their journey. While this is true, another element to examine is the difference in time zones around the world.

If you’re starting an international money transfer at the end of your work day, you need to understand that this will add extra time to your transfer. Your transfer typically won’t be sent until the morning of the next business day.

For our Canadian and Mexican business partners, time zones don’t present too big of a problem. They operate mostly within the same array of time zones that the United States does. But for countries with a significantly different time zone than the US, such as Australia and China, this becomes a trickier issue.

For example, a payment processed midday in New York is the equivalent of 4 a.m. the following day in Australia. 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 a messaging network that many financial institutions use to send international transactions. This banking infrastructure securely transmits information and instructions for transactions through a complex and standardized system of codes. This helps businesses as well as individuals send and receive electronic payments regardless of the bank that they use. 

The number of SWIFT payments processed on a daily basis reached nearly 50 million messages by the end of 2022.

Needless to say, SWIFT is one of the more popular tools for international payment processing. But because the SWIFT process moves through a number of intermediary banks before arriving at the desired destination, it can cause a lot of delays. 

A SWIFT payment can take anywhere from 24 to 48 hours and up to five business days.

6. There’s sometimes just…missing paperwork

Sometimes as much as you want to pinpoint the cause of your delay, you simply don’t know what’s going on behind the scenes of your international transfer’s journey. 

Depending on where you’re sending money, different countries have their own unique regulations, rules, and required documentation.

China, for example, requires proof that the source of the money is legal and it has been legally obtained.

Humans fill out the paperwork for these different requirements, which means there is always a chance for error. Even if everything on your end is perfect, there is no way to make sure that each form is correctly filled out or properly filed.

Missing documentation or information on a form 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.

How Airwallex can help with business bank transfers

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

While some of the examples mentioned above 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 payments in multiple currencies, in one business day or less. Our technology enables your payments to bypass the SWIFT network, utilizing local bank transfers instead, which makes your payments faster and reduces your fees at the same time.

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