Why Are Money Transfers Not Instant?


Money Transfer

When you intend to transfer money, there are a few important things you must note. First off, you need to figure out the transfer limit of the method you intend to use. You need to figure out the requirements, that is, what are needed to facilitate the transfer. In addition, you also need to determine the transfer time. But, come to think of it, in the technological era that we find ourselves, isn’t it funny that we still wait a few days for a transfer to appear? Why aren’t these transfers instant?

Transfers can be instant, however, one of the reasons why such isn’t the case is because of fraud. Banks stall transfers to mitigate the risk of fraud. They take a few days to release transferred funds to customers to ensure that it isn’t a fraudulent transaction.

Technology advancement has made things pretty easy and fast. With bullet trains that travel at 320km/h, people can get to their destination in time. Thanks to the internet, you can send messages instantly and garner information from the four corners of the world. In today’s world, everything seems to be fast. However, bank transfers seem to be one glaring exemption. In fact, it is not only bank transfers, credit and debit card transactions as well. In this article, I’ll reveal to you why transfers don’t happen in real-time.

How Much Money Can You Transfer Without Being Reported?

Why Are Money Transfers Not Instant?

Normally, when we transfer money to an individual, we expect them to receive it immediately. These transfers are done electronically, so they ought to be as fast as the internet. However, unfortunately, that is not always the case. After initiating a transfer, you may have to wait for two, three, or sometimes seven days for the funds to go through. Why is it so?

Technology has made things pretty easy and fast. With the tap of a button, you could send tons of messages to anyone in any part of the world. In addition, you could put a call across to anyone living in any of the continents. That is how far technology has advanced. Yet, we aren’t seen such advancement in bank transfers. What might be the cause of this? Are banks toying with your money? Or are they purposely delaying the transfer for reasons best known to them?

What Is a Money Transfer?

Money transfer is the electronic transfer of money from one bank account to another. The transfer can be initiated within a single financial institution or across multiple institutions, through computer-based systems, without the direct interference of bank staff.

How Does a Bank Account Transfer Work?

A bank account transfer works when individuals instruct their bank to transfer money directly into another bank account. This is often done electronically through online banking. There are a few types of techniques used to transfer money between banks. We’ll take a brief look at some of these methods below:

Wire Transfer:

A wire transfer is one of the fastest ways to transfer money electronically from one individual to another using bank or nonbank providers like Western Union or Wise. With a wire transfer, no physical cash moves between locations. The term “wire transfer” comes from a period when banks depended on telegraph wires for this type of money transfers.

A bank wire consists of directives on who will receive the money, including the bank account number and how much the recipient should get. Nonbank wire transfers might be initiated without a bank account, depending on the service. However, they will require the recipient’s details, including the transfer amount and destination. You are required to pay the amount upfront, so the transfer is final as soon as it is processed.

Cash Deposit:

A cash deposit is one of the oldest ways of sending money to an individual. It involves you visiting your bank to withdraw the money and then taking it to the recipient’s bank to deposit it into their account. While you would agree that the process is quite stressful, you must know that it comes with its advantages. There are usually little or no fees involved in such types of transfers.

Mobile Check Deposit:

A mobile deposit is a way to deposit a check without physically visiting your bank. With the aid of a mobile device that is equipped with a camera, like a smartphone or a tablet, it is very easy to capture the check, which is later uploaded via the bank’s mobile application. Mobile deposits are typically cleared within a few days.

If you aren’t ok with mobile check deposits, you can go with the old-school method of visiting your bank and depositing the check.

Having understood the various money transfer methods that exist, let’s take a look at why transfers using these methods don’t always happen in real-time.

Why Aren’t Transfers Instant?

Banks have the facilities required to speed up a transfer. However, they often don’t allow the quick transfer of money to other bank accounts to reduce the possibility of fraud. The receiving bank sometimes takes 3, 4, or even 5 days to release the funds to the intended customer to ensure that the transaction is legit.

In addition, if your bank transfer is to a credit card account, your funds might take a longer time to appear.

What Happens if a Bank Transfer Doesn’t Go Through?

Is There a Way to Transfer Money Instantly?

Most of the transfer methods of today aren’t instant, even though they are done electronically. After initiating a transfer, recipients will have to wait for 24 hours to five days to receive the money. In times of urgent need, such delay may pose a huge hindrance. However, not all transfer methods take days to appear in the recipient’s bank account. There is a certain transfer method that is instant.

The best way to transfer money instantly is by online bank transfer. Online bank transfers are instant, especially if you are transferring to a similar bank. However, the time may vary slightly for different financial institutions.

Before you transfer money, ensure you adopt a transfer method that suits the amount of money you wish to transfer, including the recipient’s location. Contact your bank for details regarding the best transfer method for your situation.

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