International money transfers shouldn’t be hectic in the current world of high technology and numerous options. However, you may face challenges when you transfer money online once in a while.
What Is a Wire Transfer?
Most international money transfers occur through a wire transfer, which means cash flow between different banks or financial bodies.
These transactions often occur through a SWIFT financial communication network. SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a worldwide cooperative that offers an international standard for financial communication.
Your wire transfer passes through numerous intermediary banks before reaching the destination. Typically, these could be between one to three banks, depending on the destination.
The bank you’re using to send the money keeps track of how the money travels from their hands until it gets to the intended destination. As a result, they need to maintain conversations about the transfer, and the SWIFT network offers convenience.
However, the communication process may take longer, and things may go wrong in between the transfers.
What Might Go Wrong In an International Wire Transfer?
Banks always verify every international transfer before approving it. While this step limits potential issues, a few problems can still occur when you transfer money online.
An international transfer goes through a long process and requires cooperation from various professionals. First, most banks and money transfer operators (MTOs) helping you send the funds do not operate in the destination country. Thus, they depend on correspondent banks with operations in the destining nation to complete the transaction.
Once you instruct your bank or MTO to process the transfer, they calculate the costs and then deduct them from your account. Then, the service leads their correspondent bank to complete the transfer to your destination.
Again, the correspondent bank deducts the amount from an account (nonstro account) they have with organizing banks in the destination country.
Seemingly, the process involves several bank accounts, hence susceptible to input errors. The mistakes can sometimes lead to delays, transactions to fail, or rejection. Similarly, several countries are very strict with their anti-fraud and money laundering rules. While these rules ensure safety for your funds, they may also cause delays and other irregularities. Here are some possible errors.
- Issuing invalid bank account information
- Giving inaccurate or wrong account number
- Clerk’s errors or omissions during manual processing
- Issues with your bank account (closed, frozen, or suffering limitations)
How Bank Wire Transfers Work
If your bank identifies any irregularity during the tracing, they will most likely try to resolve the issue by communicating with the other panels involved. However, this method may take up to several weeks since the recipient bank only replies to the inquiries voluntarily.
The investigation process also comes at an additional cost from you. However, it’s essential if you want to find the original sum that you transferred.
How Can You Recover the Money When Bank Wires Go Wrong?
Sometimes these unfortunate occurrences come when you urgently need the funds, and you don’t have the patience to wait. You can give it a few days and see if your bank resolves the situation. If no solution comes forth, you may want to consult a Financial Ombudsman to help you recover your funds.
International money transfers can fail at times, but there’s the hope of recovering your funds. However, you should ensure that you use a bank or MTO that’s certified by Financial Conduct Authority or an equivalent in the destination country.