What are local bank transfers, and how do they work?

Local bank transfers are a cost-effective method of sending and receiving money overseas. They involve a direct payment process that transfers funds from one bank account to another, typically with the assistance of one payment processor or vendor as a clearing mechanism. This approach minimizes the number of intermediaries involved, making the transfer faster and more affordable compared to international bank transfers.

What are the cost and time savings of using local bank transfers?

Local bank transfers are completed within 1 to 3 days, offering significant time savings compared to international bank transfers, which can take up to 5 days. Costs for local bank transfers typically range from $3 to $25 per transaction, while international bank transfers via wire transfer can start at around $35 and go as high as $50.

How does a local bank transfer differ from a SWIFT transfer?

Local bank transfers involve a streamlined process with fewer intermediaries, reducing complexity and costs. SWIFT transfers, on the other hand, rely on a network of intermediary banks, each charging its own fees and potentially adding service fees. While SWIFT transfers are faster for large sums or time-sensitive transfers, local bank transfers are a more cost-effective option for smaller transactions.

Can local bank transfers be used for international payments?

Yes, local bank transfers can be used for international payments, but it's essential to ensure that the service provider supports the specific currencies and countries involved in the transaction. Different regions have their own models for local bank transfers, such as SEPA (Single European Payments Area) in Europe.

What are peer-to-peer local bank transfers, and how do they work?

Peer-to-peer local bank transfers involve using a money transfer service that connects users making transfer requests in different countries. When a user initiates a transfer, the platform matches them with another user who wants to make a transfer in the recipient's country. This allows the use of local funds to fulfil the transfer request, avoiding bank charges, additional currency conversion fees, and unnecessary costs. Money transfer service providers typically charge a transparent and fixed fee for their service.