3 ms·

I have always wondered, what combination of manual vs. automatic processes are happening when one makes a bank wire (actual wire transfers, not ACH)? Because w

I have always wondered, what combination of manual vs. automatic processes are happening when one makes a bank wire (actual wire transfers, not ACH)? Because whenever I have done wires, in addition to the bank/IBAN/account numbers, there are all these manual fields like "for further credit to" etc. that are clearly having to be interpreted by someone. And very often errors come up and the funds are held or in limbo on one end or another. Does anyone have a good explanation of what happens both on the initiating bank side and receiving bank side when a wire is done? I imagine that this is why it still costs $25-40 to handle them.

jonp888 5y ago
In Europe bank transfers are free and the standard way of transferring money. Cheques are pretty much extinct. If American banks charge for them it's most likely because they can. It's standard practice in retail banking to offer commonly used things cheaply and then earn back the cost by charging loads for anything unusual. As for how it actually works, in the European Bank I worked at we debited the account and then put the transfer in a batch file and sent it to the central bank which processed them every few hours. If the transaction failed for unknown reasons, someone would, I think manually review it.
conductr 5y ago
To my recollection it’s manual and yes that’s why it’s expensive. Imagine it gets added to a queue, then daily via swift, the banks settle with each other. The queue has a bunch of different stuff and is a net single transfer between bank A and B depending on who owes who today. The manual part confirms that it was added to the queue which allows them the comfort of giving you access to the cash immediately. I think the fed insures these transactions and requires immediate availability of funds.

3 ms·

I have always wondered, what combination of manual vs. automatic processes are happening when one makes a bank wire (actual wire transfers, not ACH)? Because w

by supernova87a 5y ago

jonp888 5y ago
In Europe bank transfers are free and the standard way of transferring money. Cheques are pretty much extinct. If American banks charge for them it's most likely because they can. It's standard practice in retail banking to offer commonly used things cheaply and then earn back the cost by charging loads for anything unusual. As for how it actually works, in the European Bank I worked at we debited the account and then put the transfer in a batch file and sent it to the central bank which processed them every few hours. If the transaction failed for unknown reasons, someone would, I think manually review it.
conductr 5y ago
To my recollection it’s manual and yes that’s why it’s expensive. Imagine it gets added to a queue, then daily via swift, the banks settle with each other. The queue has a bunch of different stuff and is a net single transfer between bank A and B depending on who owes who today. The manual part confirms that it was added to the queue which allows them the comfort of giving you access to the cash immediately. I think the fed insures these transactions and requires immediate availability of funds.