To get the best result when sending money to someone urgently, you need to consider all the following variables – the recipient’s location and account, the urgency, the currency and the money transfer service provider. All this affects the cost and the speed of receiving the money.
Here are a few handy background things to know if you ever need to send money urgently. I know “Information is gold” is a cliche, but this time it can help you save money and time.
Real-time bank transfers are work-in-progress and a long-standing challenge for the European Union. It’s fair to say that uniting banks throughout the continent with an instant, cross-border network is close to successful. It’s been a decade-long effort which is uneasy to complete due to the variety of different languages, cultures, currencies and the long-established domestic bank transfer systems in each country.
Fortunately, the new Strong Customer Authentication (SCA) processes, which are part of the European Payment Services Directive (PSD2), do a great job for the adoption of speed and security measures for money transfers. These better authentication methods are being hastily adopted within banks and payment processors. The expectation is that real-time banking will become available very soon to everyone with a smartphone. Strong authentication means more people will start trusting the technology, which will lead to more demand and faster mass adoption of instant money transfers.
But what options do you have RIGHT NOW? What could you do if your sister rings you in the evening and asks for money, in another country. She promises to return the money with her next paycheck, in a month, and she will explain later. BUT she needs the money right now. What can you do to be ready for such urgent situations?
Here are your options:
- Sending within your country:
You can request your a domestic transfer from your bank account.
- Sending to another European country:
Your bank is working with SEPA instant.
- Sending cash within Europe or International:
You are a fan of the fast (but expensive) cash sending service of Western Union or Moneygram.
- Sending an international bank transfer:
You have online banking with SWIFT transfer capabilities, or you can visit the branch in person.
- Sending anywhere – instant & free (only for Europeans):
You and the recipient have a digital wallet with instant P2P transfers.
Here is everything you need to know:
What is SEPA Bank Transfer?
SEPA (Single Euro Payments Area) is a bank account transfer in euro which usually arrives in 1, and maximum 2 days. Sometimes the money clears on the same day, sometimes it doesn’t.
This unpredictable settlement timing is a major drawback. Not knowing is not very convenient. Sometimes it’s even unacceptable.
Still, this is now the primary system for bank transfers in the 35 SEPA countries: the existing 28 member states of the EU, Switzerland, Iceland, Norway, Liechtenstein, Monaco, San Marino and Andorra. SEPA payments have a minimal processing cost for the processors, which has helped boost international business in Europe.
Send SEPA transfers before 10 AM
The speed of transfers depends on internal bank processes. Some institutions complete settlements once per day, while others do it 3 times a day. Sometimes it can take 2 days or even longer if you order your transfer on a Friday afternoon.
Same-day transfers are possible within SEPA-participating payment institutions but are not guaranteed. A general rule is that same-day SEPA transfers are likely to occur if you order them early in the morning, before 10 AM. Keep in mind that no matter when you order the payment, your bank will have to process it.
If urgency is a major factor and neither option works, then you need to consider more choices.
Next came SEPA instant
The precise name is SEPA Instant Credit Transfer (SCT Inst). It was the needed upgrade to the initial SEPA scheme and officially launched 10 years later, at the beginning of 2018. It is an attempt to speed-up payments and this time make it as close to instant as possible.
By definition, SEPA Instant takes up to 10 seconds for the transfer to clear in the recipient’s account and is available 24/7. Seeing your balance updated real-time is a big deal. Keep in mind that you can send maximum 15,000 Euro.
The big problem here, however, is that SEPA Instant has not been adopted by all banks and in all 35 countries. In fact, only 22 countries in Europe are listed on the official website. Most of them have a small number of participating banks and payment processors.
It’s great if SEPA Instant is part of the services that your payment institution is providing. Just make sure that your recipient’s bank is also part of the payment network.
Because SEPA Instant is not always possible, we need to take a step back and explore more options.
Instant domestic bank transfers outside the SEPA system
Instant bank transfers are possible in many countries who were pioneers in developing their own instant bank-to-bank systems, normally before SEPA was implemented. The major holdback, however, is that these transfers are limited within the country boundaries.
The United Kingdom is one of these European countries. The ancient BACS system was insufficient as it needed 3 days to settle funds. The new system is called Faster Payments Service or FPS.
Here is a list of some European countries with domestic instant bank transfer systems and their names:
- Belgium – CEC
- Bulgaria – BISERA 6
- Denmark – Express Clearing
- France – CORE & SEPA Instant (125 banks out of 400 have adopted it)
- Poland – BlueCash; Express Elixir
- Portugal – SICOI
- Romania – ReGIS
- Spain – National Electronic Clearing System (SNCE)
- Sweden – Payments in Real Time
Stay aware of the fact that these exist, because you might need to specify the network you choose for your transfer.
So, if your urgent transfer needs to go to the next city and you have access to online or mobile banking with sending facilities – then problem solved, on the spot.
But what if your urgent transfer needs to cross borders?
Sending money abroad from Europe
If you need to send money to another continent, in a currency different from Euro, then SEPA is not possible.
Here are two options (1st is slow and the 2nd is fast):
1. SWIFT International bank transfer
You need to order a SWIFT international transfer. This usually involves a bank fee that is relatively high because more banks are needed to complete the transfer. These are called correspondent banks. Some more exotic currencies, with lower liquidity, need to pass through 2 or even 3 participating banks on the SWIFT network.
All of that could translate into 10s or 100s of Euro cost (depending on the number of corresponding banks and the amount) and 3 to 5 days for the transfer to complete.
2. Western Union or Moneygram
Moneygram and Western Union are well-recognized names around the world for instant cash transfers. They have multiple locations in many countries, which makes the service very convenient for a lot of people.
Moneygram and Western Union are great if a person on another continent needs cash fast. Even in Europe, the two money transfer providers are sometimes the preferred choice because approximately 40 million people on the continent have no bank accounts.
However, here are the 3 drawbacks you should consider:
- Sending cash is expensive – the website calculator will give you an estimate, but depending on the amount, send location and destination it can cost anywhere between 4% and 8% additional fee.
- You have the option to send to a bank account, which will be much cheaper, but then you depend on the receiving bank’s internal procedures to timely settle the recipient’s money in their account. Make sure you are sending the right currency to avoid unfavourable exchange rates or fees on either side.
- It takes time for both the sender and the receiver to visit a physical office location to send or collect the cash.
Both international SWIFT bank transfers and cash transfers are relatively expensive to what is available via your smartphone, with no need to visit any location to send, receive and spend money, instantly.
Your free & instant alternative
iCard gives Europeans an instant, convenient and free alternative to bank transfers and money sending companies.
Now, ask yourself, is the receiver of the urgent money a resident of an EEA country?
If yes, then iCard can help solve the money problem within a few hours. If both you and the receiver have iCard accounts already, your transfer can be instant and free.
Even if both are installing iCard for the first time now, it’s still possible that the money transfer goes out very quickly – within a few hours. Both of you can simply download iCard and register an account. The Starter account limit of 150 Euro is available within minutes. After we verify your identity, you can send and receive money up to the “Standard” account limits.
To speed things up, you might want to store a debit card and be ready to fund your wallet on demand. To send a free and instant money transfer, you need the recipient’s phone number that is connected to an iCard account.
Next, money can be spent via mobile payment on Android and via one of the 2 free virtual cards that every Standard account has.
Your fully verified, Standard iCard account lets you send SEPA Euro transfers with a few taps. The fee is 1.00 EUR per transfer.
Easy international transfers to 200 countries with iCard
What if you need to send money to the bank account of a foreigner, in foreign currency and in Asia? iCard lets you send international bank transfers from the app, quickly and easily, in over 200 currencies.
You can order a SWIFT transfer directly from iCard. All you need is to provide the receiver’s bank details and we will handle the rest. We will serve you an up-to-date market quote for the transfer before you confirm. This way you should not worry about foreign exchange fees on the recipient side.
Are you happy with the way you currently send money? Let us know in the comments below.