How to Make International Payments – Guide
When I moved to France in September, I realized that not every country in the world has such an electronic and fast banking system as the United States. I had to submit document after document, wait for my requests to be processed, and then wait for my card, PIN, and online banking information to arrive in the mail (all in different letters, of course). In total, it took me about five weeks to get a French bank account.
I needed a French bank account with a French IBAN (International Bank Account Number) to be able to pay my bills.
Main payment networks by bank transfer
FAST
The Society for Worldwide Interbank Financial Telecommunication was created in the early 1970s to help banks communicate more securely and quickly with each other regarding the processing of payments by bank transfer. SWIFT is a Brussels-based organization that has been in existence since the early 1970s.
How does SWIFT work?
Swift is a communication network that connects banks in more than 200 countries. It is the largest international payments network in the world. SWIFT insists on the word “communication” because its purpose is to help banks communicate with each other.
Swift is a network of banks that use messages to communicate with each other. The network allows for the payment of bills, goods, and services. The network is used by businesses to send payments to their customers.
SEPA
The Single Euro Payments Area was created in 2008 to simplify cross-border payments in euros in Europe. SEPA payments are similar to domestic payments, and the zone includes 36 countries.
How does SEPA work?
The European Payments Area (EPA) works in a similar way to the global standard for international payments, SWIFT. However, EPA is only for payments in euros within the zone. This means that banks have direct or indirect relationships with each other. ..
Payment codes by country
BIC (also known as SWIFT) for international payments
The Bank Identifier Code (BIC) is a code assigned by SWIFT – the organization – when the bank joins the SWIFT network.
What is the difference between a BIC and SWIFT code?
When making an international payment, you will need to use a code. There are many different codes, but they all refer to the same thing - the unique identifier for a bank. For example, SWIFT code is used when making payments between banks in the United States, and BIC/SWIFT code is used when making payments between banks in Canada. ..
What does a SWIFT/BIC code look like?
BIC Code: 8E2-BBB-4D2-A8F3-C5F6-7DBCB5E1AEE
IBAN code for SEPA payments
Banks issue IBAN codes according to a format described in the IBAN Register. These codes are unique identifiers for bank accounts. ..
What is an IBAN code?
The bank and account details are: Bank: HSBC Account: 123456 Country: United Kingdom Bank account number: 0xc4c4c4c4 Account type: Mastercard
The IBAN number is a unique identifier for a bank account.
The two-letter country identification code is the unique identifier for a country.
BBAN is the basic bank account number.
The IBAN system is a global payment system that allows banks to process payments in a more efficient and secure way. Participating countries include 75, including the 36 countries of the SEPA zone. However, mainly European banks use the IBAN system. The US and Canada are two major countries that do not use the IBAN system, but recognize the system and process payments.
BSB for Australian payments
The Bank State Branch code is BSB. You must have this 6-digit code in addition to the SWIFT code when making a payment to Australia.
What does a BSB code look like?
This 6-digit code is used to identify a product or service.
The first two digits of a bank or financial institution’s identification number identify the bank or financial institution.
The third digit of a branch’s location refers to the state where the branch is located.
The last three digits of a bank’s branch address provide the bank’s unique identifier. ..
ABA for US payments
The ABA number is a unique identifier for a bank account in the United States. It is also used to identify the bank that opened the account and to track the account’s transactions.
What is an ABA code like?
The first two digits are the year, and the last seven digits are the sequential number for that year. For example, 2009 has a 9-digit code of 019. ..
The Federal Reserve Routing Code is a four-digit code that tells the Federal Reserve how to process payment.
The Bank identifier is four digits long. ..
A checksum is a one-digit number that is used to verify the accuracy of a digital transaction. If the checksum does not match, the transaction is flagged and may be rerouted for manual processing. ..
CNAPS for RMB payments to China
China’s CNAPS payments system is gaining in popularity, as it offers enhanced security and faster processing times than traditional methods. However, only those who are sending payments in RMB or CNH to China will need the CNAPS code. For all other currencies, only the SWIFT code is necessary. ..
What does a CNAPS code look like?
The China National Petroleum Corporation (CNPC) is a state-owned enterprise in China that is responsible for the production, marketing, and sale of oil and gas. CNAPS is a 12-digit code that can start with the code word CN to indicate that the account is in China.
The 12-digit code refers to a unique identifier for a computer system.
The first 3 digits of a bank’s bank code are the code for the bank.
The next 4 digits represent the city code of the city in which you are located.
The next 4 digits represent the branch code of the bank.
The last digit is the verification code for the account.
Bank code for payments in Hong Kong
There is no specific format for the Hong Kong bank code. In addition to the SWIFT code, you will need a 3-digit bank code, a 3-digit branch code, and a 6-9 digit account number. ..
What is a Hong Kong code?
HSBC account: The bank code is always given separately, the HSBC bank code is 004. It is also common to see HSBC 812-852456-888.
Classification code for UK payments
Sort is not an acronym for anything. The name of this code dates back to the last century, when 5-digit national codes (for manual processing) were replaced by 6-digit classification codes (for automated processing). So the sort code is literally a code that helps the bank sort payments to the right UK account.
What is a classification code?
The sort code is a six-digit code that is always written as three pairs of numbers. The first two digits identify the bank, the next four digits identify the branch.
Fees
- The currency conversion fee.
- The bank transfer fee.
- The wire transfer fee.
- The processing fee charged by the financial institution you’re using to make the payment.
- Any applicable taxes or fees levied by your country’s financial institution or government on top of those fees (e.g., an annual percentage rate). ..
The shipping fees charged by a payer’s bank are the fee the payer’s bank would charge for making an international payment.
The correspondent banking fees are a cost that banks incur when they do not have a direct relationship with each other. This can be due to a variety of reasons, such as the banks being in different countries or having different business models. ..
The receipt fee is the fee the recipient’s bank would charge to receive an international payment.
When an international payment is made, the exchange rate is the rate at which one currency is exchanged for another. This can be different depending on the currency being used. ..
How much does it cost to make a SWIFT payment?
It is practically impossible to estimate how much an international transfer will cost, it varies depending on the banks involved in the transaction, the currencies involved, the amount, whether there are intermediary bank fees, etc. You can pay up to USD50 to transfer money from Country A to Country B. Make sure you are using a correct SWIFT code to avoid late payment and paying a return fee.
When you make a SWIFT payment, there are three ways to pay international transfer fees:
Our company charges all bank charges. Your beneficiary will receive the full payment amount. You are typically billed separately for these charges.
You pay nothing and your beneficiary pays everything. The charges will be deducted from the amount they receive. BEN (Beneficiary) = You get to choose who your beneficiary is. You can choose someone you know or trust, or you can choose a charity. ..
If you want to send money to a friend or family member, you’ll need to pay the bank’s outgoing transfer fee and their bank will charge them a receipt fee and any associated fees. ..
How much does it cost to make a SEPA payment?
When you make a SEPA payment, you’ll usually have to pay a domestic transfer fee. This fee usually means it’s free. ..
Processing time
Bank transfers are usually only processed on the same business day if they are requested before the bank’s cut-off time. In some cases, they are processed on the next business day due to the time difference. In Hong Kong, these cut-off times vary +/- 30 minutes from bank to bank. You can see the cutoff times for international transfers for major currencies below.
A bank processing an international transfer on that business day does not mean it will reach the recipient’s bank account on the same day. What happens after you make the payment instruction is beyond your control. Like you, we’d love to see real-time SWIFT transfers, but we’re not quite there yet.
There are many factors that can delay your international transfer. Some of the most common reasons are incorrect bank details, holidays, weekends, time zones, destination country, regulatory checks, number of intermediary banks and more. If you’re not sure whether your transfer is going to go through or not, please contact your bank or the recipient’s bank for more information.
Final note
How to Make International Payments: A Guide for Beginners
