International wire transfer: you get to choose the currency
Today in the world where everyone is involved in different types of economic relationships, where one of the most widely used operation is money transmission. it’s clear that the most cost effective way is to transfer the money within one country in its particular currency but when it comes to international wire transfer, for instance, some people face the problem of currency choice.
At this stage the majority decides that USD wire transfer is the most suitable way to send the money without even considering other currencies, because it’s stable, well-known, wide-spread, it’s a monetary standard after all!
Well, that is true, but you should know that there are other currencies that also possess some pros. For example, euro wire transfer is cheaper and faster. To make it much easier to understand the difference, we will try to explain the way how international wire transfer is carried out.
The fact is the governors of The European Union try to do everything to keep EUR in demand. The Single Euro Payments Area (SEPA) was created for this purpose as well. SEPA makes possible the idea of elimination of the differences between internal and external euro wire transfer. The Single Euro Payments Area deals with the most topical problems of money transfer: time and cost. The simplification of bank transfers streamlines the payment processing, so you can get the SEPA-payment within one business day after its arrangement. Besides the banks are obliged to charge every SEPA-payment in the full amount to the beneficiary bank, in such way your international wire transfer will cost as the domestic one, and you have additional savings.
In its turn, the US banking system puts the financial transparency and legitimacy first, analyzing the payment history in order to avoid the transfer of illegal incomes and transactions that could compromise on security of some countries. In particular it applies to international money transfers. In the context of overall tense situation in the world and some of its parts in particular, when the number of cases regarding illegal activities related to money laundering and financing of military operations is constantly growing, US banks are trying to identify the movement of illegal money and to influence those who are breaking the law.
For this reason,sometimes American banking system could be less client-friendly in terms of international wire transfer. The correspondent bank is an additional link in the chain of money transmission. That means that your payment is processed for a longer period of time and you undertake to carry out some fee fixed by correspondent bank. Sometimes the correspondent banks of USA choose to delay or cancel the payments for the reason of safety concerns. But, let’s be honest, that does not happen on a regular basis.
The reasons for this are different, such as: political instability, underdeveloped financial infrastructure, suspicion of financing terrorism or military operations and money laundering etc. Unfortunately there is no certain criteria defining illegal international wire transfer or any other questionable activity, so you can not make something like a plan of actions to have your payment successfully processed. At times the reasons of delay or cancellation remain unknown for those who was involved in that kind of trouble. But that happens quite seldom. The only way to avoid this is not to break the rules.
In conclusion we’d like to say that actually USD wire transfer it is not so bad, it can be more cost-efficient if you are going to spend it in the country where the official currency is USD, anyway it is recognized all over the world, it will not be the problem to exchange it. The correspondent banks do a lot to meet the demands of their clients. But if there is no any particular difference, euro wire transfer could be more time and cost efficient.