Transfers have been an important feature in our monetary dealings.
Be it bill payments, money sent to family, or a business deal in particular, many among us rely upon the speed and efficiency of bank transfers to ensure timely transfer of money.
With improving technology and finances, there comes a time when your bank transfer shows up as late.
These are bound sources of frustration and inconvenience, especially if one is right in the middle of a time-sensitive transaction.
Understanding the causes of these delays helps avoid the stress developed by such uncertainties as to why a transfer has not gone through as anticipated.
In this article, we look at some common causes of why your bank transfer is delayed and provide insight on how to minimize such delays in making smoother transactions.
Reasons Why Your Bank Transfer is Delayed
-
Banking Hours and Non-Banking Days
Causes of delays in bank transfers include those concerning banking hours and days of business that the banks involved usually deal with.
Most of them have fixed hours of operation, meaning that no form of payment or transfer of funds would be approved outside such periods.
Weekends and Holidays:
During weekends and holidays, banks are on holiday; therefore, all the transfers initiated would need to wait for the next available business day.
That is to say, a bank transfer initiated on Friday evening could not get processed until Monday.
Time Zone Differences:
The main reason bank transfers between countries take time is because of the difference in banking hours between the two countries.
It doesn’t matter if your bank is open on your end, but if the receiving bank in another country is closed.
This may lead to delays in processing the transaction, especially if you are doing an international transfer across different time zones.
-
Internal Bank Processing Times
Transfers can also be held up by delays in internal processing at your bank, even on normal days when the banks are open: domestic transfers, wire transfers, and international payments have all differed in various ways.
Batch Processing:
Banking can be thought of as a processing system where a series of transactions is collected in one batch to process at specific, particular times of the day.
When your transfer just misses the cut for such a batch window, it further can be delayed until that time scheduled for the next batch processing.
Verification Process:
The bank processes delays to confirm the authenticity of a transfer.
This is generally seen in huge transfers or that kind of transfer, which seems suspicious regarding your account history.
Sometimes banks hold funds on standby to confirm the transaction isn’t in breach of AML and fraud prevention guidelines.
High Transaction Volume:
Summer holidays, tax seasons, or any other busy period may be the reason your bank is dealing with many transactions.
This may be a factor as to why your transfer is taking so long to be processed, for at that particular time, the system has a lot of requests.
Read about: The Best Way to Transfer Large Sums of Money Abroad
-
Incorrect Account Details
Other common reasons for delays in bank transfers are incorrect or incomplete account information.
This may include providing the wrong account number, IFSC code in the case of Indian bank transfers, or even your routing number.
If such details do not match with the ones the receiving bank has in its record, the deal is going to be delayed as the bank investigates such matters or attempts to sort them out.
Typo Entry Error:
A single typo in entering your recipient’s account information may lead to delayed execution of the same.
Banks, under these circumstances, usually have to manually correct it every time the transaction fails to pass through some of their automated algorithms for the actual intended transfer of money.
Error in the beneficiary’s name:
Sometimes, there is a mismatch in the name of the sender and the beneficiary.
For example, if you pay into a business account and that name is not the one expected by the bank, the money transfer may be delayed or sent for review.
-
Bank’s Security Checks and Fraud Prevention Systems
Advanced fraud detectors are used for fraud security by banks to save their customers from unauthorized transactions.
Although this is a very important mechanism, in some cases it may delay things.
Suspicious Transaction:
Some transactions that show up suspiciously in the bank’s security system, instantly freeze or put them on hold until verification is done.
These might be large monetary deals or transfers to new overseas recipients.
Cross-Border Transactions:
International transfers, most of all between different currencies, are scrutinized to a certain extent.
This could delay a transfer pending further information to adhere to international financial laws like FATCA in the United States or AML laws in other countries.
Read about: Navigating Cross-Border Transactions: Key considerations
New or Unusual Transactions:
If the nature of the transfer is unusual, about your normal expenditure or the pattern of transactions on your account, then the bank can temporarily block the transfer to verify that it is not fraudulent.
For instance, if you usually send small payments and then suddenly attempt to make a large transfer, then the bank has the right to hold the payment for verification.
-
Technical Glitches and System Outages
Issues with the bank’s system may also be another cause for the delay in transferring.
Such glitches can be due to maintenance, bugs in software, or failures in hardware that impede the timely processing of any form of payment.
Scheduled Maintenance:
Sometimes, banks do plan maintenance to either upgrade their systems, iron out bugs, or enhance infrastructure.
During such scheduled maintenance, transfers may be unavailable or delayed.
If you have a time-of-the-essence transfer, then it is good that you find out whether the bank is on maintenance.
Connectivity Issues:
Sometimes, there is a delay in connectivity internal problems, within the connectivity at the bank’s end or externally related to Internet or network connectivity.
If the bank’s server goes down or sees heavy traffic, then there will be more backlogs due to which transfers will get delayed in being processed.
-
Type and Method of Transfer
Bank transfers take different times to be effective, depending on the type of transfer, which shall depend on how you have initiated it.
Wire Transfers:
Wire transfers, especially international, take longer than usual as compared to wire transfers across the border.
For instance, it will take a few business days for an international wire transfer to be effective since the clearing of funds is supposed to be done across the border.
The banks have to check the details of the recipient, and the prevailing current currency exchange rate, and sometimes the usage of intermediary banks causes the delay.
ACH Transfers
Most countries, just like the United States, make use of the network of the Automated Clearing House to process online electronic transfers of payments.
Of course, ACH transfers take 1–3 business days depending on whether it is a standard or expedited transfer.
Transfers via SWIFT:
The cash moved across borders on the SWIFT network has to make multiple stops en route before it lands in the recipient’s bank.
Every stop causes delays, more so if an issue crops up at any of the stops.
Real-Time Payment Systems:
Some banks and financial institutions have moved to real-time payment systems whereby money is transferred in almost real-time.
Not all transfers are made via RTP systems, and when traditional methods are used, the transfer will take longer to process.
-
Insufficient Funds in Sender’s Account
Lacking enough money in your account to cover the transfer may also be a cause for delay.
Most banks will delay or refuse to perform the transaction if there is not enough money in the account of the sender to effect the transfer.
This often happens in the case of an automatic payment or direct debit whereby the bank would have tried to take the money from your account and find out it is not there.
Overdraft Protection:
Some banks offer overdraft protection services whereby they pay the difference between the requested amount and the available balance.
This may further delay the processing because additional steps are taken to approve the transaction.
Credit or Debit Card Limits:
If your transfer is being financed by credit or debit card and the transfer amount exceeds the card limit, you may find a delay.
The funds may be flagged for review until this discrepancy is rectified.
-
Bank Internal Review Procedures
This could also involve some internal review by the banks to ensure that, especially for large transfers, a transaction is indeed compliant with relevant regulations and guidelines.
It might be a check of the transaction against sanction lists, verification of the parties to the transaction, or the legitimacy of the transfer.
Large Transfers:
If the amount of money being transferred is large, then such transactions may be picked up for scrutiny.
In that case, the bank may call the sender or the receiver to verify the details of the transfer, which could delay the transaction.
International Sanctions:
Banks have to check that the transfer does not involve participants of countries under international sanctions.
In case it happens that one of these regions is involved in the transaction, then it may cause a delay until the bank works things out.
-
Currency Conversion Issues
During a cross-border money transfer, currency conversion might be one of the reasons for delays.
Banks may take some extra time in currency conversion in respect of less liquid currencies or if the currencies need some extra regulations to be obeyed.
Fluctuations in Exchange Rates:
The exchange rate between currencies can change a great deal.
Due to timing differences in the exchange rate changes, delays in a transfer may result in recipients getting an amount different from what was expected.
-
Issues with the Receiving Bank
Even though your bank has executed the transfer correctly, the recipient’s bank may hold it up.
This can be because of issues within the internal system of the recipient bank, an incorrect account number, or a backlog of transactions.
Conclusion
Bank transfers can be delayed due to various reasons, which include technical issues, wrong account details, security checks, and internal bank processes.
Knowing these factors will help you better anticipate such delays and learn how to stay away from them when you send or receive money.
If a delay is at hand, try contacting your bank for clarification and see if there is an issue with the transaction.
Whether for personal or business use, understanding the delay reasons will assist in minimizing frustration in addition to empowering you to act if need be.
Do follow us on Facebook and LinkedIn, to stay connected with us.
