Whether you have friends, family or spouse abroad, you may need to receive money overseas. This can be a complicated process and could potentially be confusing for a first-time recipient since every bank seems to have its own rules for money transfer. This guide will help you understand the process of receiving a money transfer.
How Does an International Transfer Work?
International bank payments are usually actioned via the SWIFT network. This is a secure messaging system that financial institutions use to send financial details. When sending transfers, financial institutions usually use the SWIFT network to make sure you get the fund.
However, the money won’t always get there nonstop. Some international bank transfer payment goes through intermediaries, which is also known as corresponding banks. It is also worth mentioning that the SWIFT network is not responsible for moving your money; they only transfer payment orders.
What You’ll Need When Expecting Money Transfer
1. Have a Bank Account
You will be surprised by the number of Americans who do not have a bank account and only use cash or prepaid debit cards. Most of these people meet the minimum requirements needed for opening a bank account. Some people feel that their credit scores are not high enough. Indeed, several bank accounts require a minimum credit score, which is quite high.
However, many banks also don’t require a credit score. Besides, these banks don’t run reports on you and don’t know if you owe another bank money. However, these banks usually have high fees and other terms.
2. Provide the Necessary Information
A lot of people don’t like sharing their personal details with anyone. This is understandable; there are a quite number of scammers out there. However, before you can receive a money transfer, you will need to give some of your information to your sender. What is required depends on the financial institution used by the sender. Some of the information that your lender will require include:
- Name and address: In addition to sending your legal name, some financial institutions require recipients to have physical addresses. They need this for anti-money laundering and security purposes.
- Your bank information: The bank needs to have this information to know where to deposit the money. The data usually includes your bank name, bank account number, and SWIFT or BIC code.
3. Wait for The Money to Transfer
Domestic transfers are almost an instance, but most international transactions usually take more time. Currency conversion accounts are the major cause of these delays. There are several different currency markets that convert USD to other countries currencies. These currency markets charge different fees. Network infrastructure is a factor that also accounts for some delays. Many financial institutions have great services for their local customers but don’t manage international transfers.
International transfers are often risky, mainly because of the boundary issues and said international recognition. Also, international transfer generally requires between one to four business days to complete. Usually, when your sender confirms their transfer, the bank will give you the expected completion date. You may want to check with the sender because they usually have the most up-to-date information.
4. Observe Your Bank Account
Banks usually send alerts to the senders when they start processing the transfers and when the international transfer is complete, or there is an issue. Banks also usually send alerts to recipients when the transfer is complete. However, the best way to know when a money transfer is done is to check the activity of your bank account. Sometimes, the recipient bank may place holds on the transaction, but this issue is between you and your bank.
How Do Exchange Rates Affect the Amount You Receive?
The total amount of money you receive may be less than what you are expecting if the sender doesn’t cover the currency exchange when transferring the money. A little difference in the exchange rate can have a big impact on the amount you receive, especially if the sender is transferring a huge sum of money.
A lot of factors affect foreign exchange rates, such as demand and supply, market conditions, economic and political factors. If you’d like to avoid surprises, then it is a good idea for the sender to look around for a transfer service that provides competitive exchange rates, especially if they are sending a huge sum of money.
Receiving a money transfer has become easier than ever before, with a variety of options to choose from and short waiting times. The mode of transfer, transfer time, and cost of receiving a money transfer all depend on the financial institution used by the sender, along with the country and currency in which the recipient will be getting the money.