International payments are the nerve of the business world today. The speed of transfers directly affects supply chains, business success, and partner trust. That is why business is increasingly concerned not only with the price of the transaction, but also with the speed: how long financial calculations are carried out.
When does the money arrive the fastest?
Today, in the world of international transfers, questions about “fast” and “slow” countries are secondary: It doesn’t matter which jurisdiction the money goes to, of course, unless we are talking about countries on the FATF (Financial Action Task Force on Money Laundering) blacklist. The nuances of the transaction route are much more important. They can occur almost instantly in several cases.
One bank, one currency
The fastest transfers are intrabank transactions in the national currency of the jurisdiction where the payment is made. The logic here is simple: when the sender and recipient are serviced by the same bank, money does not need to “travel” along complex routes. For example, in China: a transfer within the largest bank in yuan will take place almost instantly.
One correspondent bank
Correspondent banks are those financial institutions through which the payment passes, if there is no direct connection between the banks. If the chain of correspondents is minimal (especially if the parties have the same correspondent account), the speed of payment is significantly higher simply because payments go through the “corridor” without unnecessary “transfers”.
Fast payment systems
The third option in terms of speed are local fast payment systems: European SEPA system, and American ACH. Their task is to automate and reduce the cost of funds turnover within large currency zones. Such systems often provide a transfer in a matter of seconds, if there are no additional risk factors.
When the speed loses its force
When a money transfer goes beyond the borders of one country and the banking system, correspondent banks come into play. Each stage of such a route is another chance to slow down, verify, or even “freeze” the payment due to compliance (checks on the origin, destination of funds, and the reliability of counterparties). The timing of execution depends on the work of specific banks and even on the “sentiments” of the correspondent banks, which may arrange additional checks if questions arise to one of the parties (for example, if the sender or recipient had previously had a negative case, which is reflected in the banking system).
Geography of speed: myths and reality of jurisdictions
By itself, jurisdiction is not always a key factor in the payment speed. The main thing is the transparency of the transaction, the coincidence of the profile of the companies and the purpose of the transfer, as well as the degree of trust of banks in each other.
However, there are countries where it is simply impossible to send a payment, not only because of the obvious sanctions (Iran, Syria, North Korea), but also because of the internal policies of individual banks. Sometimes they can be overly cautious and avoid working with participants in acute global events: for example, in the spring of 2024, Japanese banks massively refused transfers to Israel after the active phase of the conflict with Palestine.
Hidden delay triggers
Transfer amount
Sending large amounts attracts special attention from the relevant banking services and may be delayed due to internal controls and requests for additional documents. In addition to the internal regulations of banks, it is worth considering working calendars — national holidays and weekends. It seems to be a banality, but many people forget: if it’s a weekend or a public holiday in the USA or China, the banking day there is shortened. In this case, transactions are frozen until the first business day, and this does not depend on the internal regulations of the senders. The exception are progressive online banks, which are able to launch payments on non-business days if their correspondents are working at that time.
Banks pay less attention to small transactions, but with a suspicious structure (for example, an atypical jurisdiction), even a small payment can cause suspicion, which automatically adds a few extra hours or even several days of waiting for the transaction.
Time zones
This is another “invisible” barrier. It is almost impossible to coordinate instant processing between America and Hong Kong: while they are just getting up on one side of the planet, it is already night on the other, and if the bank has questions, the chain is extended until the next operating window.
How can a payment agent speed up a money transfer?
Practice shows that an individual approach to transaction processing, careful selection of jurisdiction, bank and currency allow to choose an option that allows money to arrive really quickly.
A modern payment agent doesn’t just send money — he plans the transfer by analyzing customer history, billing reputation, upcoming holidays, and route congestion. And he suggests a scenario where everything is taken into account: the desire to minimize costs, speed requirements, and the level of trust between the parties of the transaction. This approach is especially important for small and medium-sized businesses, where the cost of an unsuccessful or delayed payment is extremely high. Therefore, it is important to select a reliable payment agent who understands in detail all the nuances of international transfers.
Recommendations: how to speed up your payment path
Today, financial logistics is becoming part of the company’s competitive advantage. It is useful for the payment to arrive quickly:
- coordinate in advance the paying company with the recipient (supplier);
- provide as much information about the payment as possible — contracts, information about open accounts/banking details (this may help to find the optimal solution), a link to your website;
- contact payment agents who will be able to choose the best route for payment;
- check the production calendars and time zones of the countries through which the payment is made.
Conclusion
The speed of international payments is not an accident, but the result of competent planning and knowledge of the nuances of financial routes. In order for money to arrive as quickly as possible, it is important to take into account not only tariffs and commissions, but also the working hours of banks and the specifics of currency systems, as well as to choose the right payment partner, whose role has recently become key for any business operating at international speed.
By Shahen Grigoryan, General Director of the FEA-Master Company