Bank transfers are commonplace for most people. In very simple terms, a bank transfer is an operation of sending and receiving money from one account to another. It seems elementary and standard. However, there are variables that make one operation different from another, and among the most important are the financial institutions and the mechanism used to make them.
To begin with, if a transfer is intra bank, that is, it is made between two accounts in the same institution, be it a bank or a neobank, the process will be fast and surely cost-free. This is the case of the intra bank transfers of Blackcatcard, a financial institution headquartered in Malta and licensed in this country, since it allows its clients to make Euro money transfers from one account to another instantly, with no limit on the amount and without commissions.
On the other hand, if it is a transfer between two accounts opened in two different financial institutions within the same country, additional fees may be charged, due to the operation cost generated by the transfer for those institutions, and it may take from a few minutes to 48 hours. Now, if we consider an international transfer, the costs and times may be even higher. If it is done through SWIFT’s transfer system, it can take up to 5 days and involves considerable commissions. In order to reduce costs and times and to unify the mechanism of bank transfers within Europe, the Single Euro Payments Area (SEPA) was created, which includes all the members of the EU and 9 other European States (among which the United Kingdom, Switzerland and Norway stand out). Due to the speed of the operations and the low cost, SEPA bank transfers are the most used by individuals and companies in Europe.Â
This mechanism, initially implemented by banks, is now used with excellent results by neobanks, whose customers have been able to take advantage of it. For example, at Blackcatcard individual clients can make up to 5 SEPA transfers free of charge per month. From the sixth onwards, a commission of 0.20 Euros is charged, which is really low if we are talking about international transfers. Of course, these operations are not instantaneous, as interbank transfers are. The speed of SEPA transfers depends on the scheme used. In total there are 3 of them: SEPA Credit Transfer; SEPA Instant Credit Transfer; SEPA Direct Debit; and SEPA Direct Debit. For example, if the SEPA Credit Transfer scheme is used, the operation, as a rule, cannot take more than one business day. With SEPA Instant Credit Transfer, on the other hand, transactions are completed in a matter of seconds.
In fact, these operations can take more than one day for multiple reasons related to the user’s actions. For example, if the user makes a transfer one day before the receiving bank closes, before the weekend or a holiday, for example. They may also take longer due to Compliance and Anti-Money Laundering issues, as it may happen that the customer who sends the money does not indicate the correct or complete information, for example the name and surname of the sender and receiver or the purpose of the payment.
Against this backdrop, intra bank and international transfers in Europe can be carried out extremely quickly, thanks to the creation of modern regional payment systems, such as SEPA.
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