Some common reasons for payment issues include input errors, delays due to weekends or bank holidays, missing documentation, time zone discrepancies, currency conversion, and global events or natural disasters. We discussed some of the most common reasons for issues with money transfers with representatives of the British fintech company.
Common Input Errors in Payment Processing
Input errors are one of the most common reasons for payment issues. These errors can occur when entering long strings of numbers, and even a single incorrect digit can result in funds being sent to the wrong recipient. In most cases, payments with incorrect details are returned, causing significant delays in both local and international bank transfers. To avoid delays, it’s essential to double-check the recipient’s name and account details before processing any payments. In case of an error, it’s important to contact the financial institution as soon as possible to rectify the issue.
Understanding Payment Delays in Money Transfers
Money transfers are typically processed instantly, but several factors can lead to delays, which may take up to several hours, overnight, or even the next business day. These factors include transfer timing, location, the currencies involved, security checks, and the purpose of the transaction. International bank transfers may also experience delays due to limited staff, changing working arrangements, or global events, such as natural disasters. It’s essential to consider bank holidays and cut-off times as they may cause delays, and it’s important to note that bank transfer times only include business days and exclude public holidays.
Challenges with International Bank Transfers
International bank transfers come with various challenges, one of which is a currency conversion, which can result in delays. Processing times for bank transfers can vary depending on the destination country and the currencies involved.
Another important factor that can affect how long an international bank transfer takes is time zone differences. If you’re sending money to a country with a significant time difference, it’s essential to consider how this can impact the bank transfer process, which may take longer than expected.
Providing the necessary documentation can be a challenge when it comes to international bank transfers, and failure to do so can result in significant delays. Each country has unique requirements, which can be complicated to navigate, making it essential to have all the required documentation in place to avoid any delays in processing.
Brexit-Related Challenges in Cross-Border Transactions
According to a British fintech company, new payment difficulties have emerged in the UK after Brexit, including additional third-party bank charges and additional data requirements. Due to the UK’s departure from the EU and EEA, payments between the UK and EEA countries no longer fall under the PSD2 definition of intra-EEA payments. As a result, certain European banks now consider SEPA credit transfers and direct debit transactions between the UK and Europe as cross-border, leading to additional bank charges. Moreover, transferring money between the UK and the EU now requires additional information under the Funds Transfer Regulation of the European Union, which may result in payment rejection if not provided.
Fraud Prevention Procedures
When initiating an international wire transfer, banks must follow extensive fraud prevention procedures. For instance, the SWIFT network mandates that each transfer include information on up to three correspondent banks before reaching its intended destination. Additionally, once the funds have arrived at the destination, the recipient’s bank may have its fraud prevention procedures, which could further delay the payment.
Furthermore, to comply with anti-money laundering regulations, we must provide as much accurate information as possible about the recipient before the payment can be processed. This can be particularly challenging for companies with complex ownership structures, such as startups, which often have new investors and beneficiaries joining during project development.
Issues with Financial Service Providers
Issues can sometimes arise from the financial service provider’s side when it comes to payments. In such cases, the first step is to request proof of the transaction from the sending bank. If the financial service provider can provide evidence that the payment was made, they must conduct an investigation and attempt to retrieve the missing funds. Additionally, it’s critical to report the error if this happens. If the financial service provider cannot recover the funds immediately, they must conduct an investigation and inform the person who initiated the transaction within 20 days.
Improving Payments with Fintech
Payments can sometimes be a headache, whether it’s due to human error, technical glitches, or even fraudulent activities. However, financial services are continuously working to improve their systems and processes to make payments more secure and efficient for their customers.
According to a British Fintech company, while payment issues may still occur, financial services are doing their best to provide transparent and efficient solutions for their customers. By choosing a reliable provider and promptly reporting any issues, you can help ensure your payments are secure and hassle-free.