How do international money transfers work

The need to send money to another country might hit you anytime – both for your personal or business needs. Thus, knowing what to do in this situation is important, and Genome got you covered.
In this article, we will describe the best ways to transfer money internationally, so that you can understand which way is the most beneficial for you.

International transfer companies

If you or a person/business who you send the funds to don’t have a bank account, you can use international wire transfer services. Companies that provide these have branches in some countries and allow you to send cash to another person or entity if they are located in the same place as one of the company’s branches. 

Some companies offer to deliver money straight to the recipient’s door. Still, as you can imagine, visiting physical branches to send money might be time-consuming for both parties. 

Other worldwide money transfer businesses operate online and you can send money through a mobile wallet or, ultimately, will need your bank account details to do so.   

At the end of the day, both physical and online international transfer companies remain an option but problems can occur: money transfer limits, especially for cash, inability to send money to a specific country/region, high service fees, inconvenience with physical branches, too many details are required to make a transfer, like a person’s address for delivery, etc.

Hence, we recommend you use a bank account for international money transfers. For instance, Genome allows you to manage all your money online and from one dashboard. International money transfers are available for both personal and business needs, so if you need a bank account for that – you can use Genome’s detailed tutorials for opening a personal, a business, or a merchant account. It’s easy and fast – the onboarding for a personal account takes minutes, and with our merchant account, you will start accepting payments within 72 hours.

Now that we talked about international transfer companies, let us describe the most common ways to send money abroad using a bank account. 

International bank transfers with SWIFT

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a messaging network, using which the banks exchange information for performing operations like money transfers. Established in 1973, it is now the most common way to transfer funds abroad with over 200 territories using it. 

It works like that: using the SWIFT code, the network sends payment orders between banking accounts to initiate the transfer. 

The SWIFT codes are also known as Bank Identifier Codes (BIC), and, as you might’ve guessed, are used to differentiate between the banking branches you are sending money to. 

The BIC is 8 or 11 characters long and combines both letters and numbers. For instance, let’s take a look at this SWIFT code example: LOYDGB22TSY.

  1. The first four letters contain the name of the bank; in this case, LOYD stands for Lloyds Bank.
  2. Then follows two letters representing the country the bank is situated at. GB is for Great Britain.
  3. The next two digits (might also be two letters) represent the location of the banking branch. 
  4. Lastly, the last three characters (letters or digits) are optional and stand for the branch code. 

Many banks, especially those that deal with money transfers around the globe, provide SWIFT services. To make such a transfer, a client usually needs to fill in these details:

  • A beneficiary’s full name;
  • A beneficiary’s SWIFT code/BIC;
  • A beneficiary’s account number or an IBAN. You can find out more information about what is an IBAN and why I used, check out our article on the topic

Usually, it takes from 1 to 3 business days to complete the SWIFT transfer, it depends on currency exchange, time zones, and holidays. The fees and transaction time differs among banks.

International money transfers with SWIFT alternatives

Surely SWIFT is not the only option for money transfers. The alternatives, for instance, include e-Wallets, which is usually an app where you can store money and buy products and services with. For more information about the difference between electronic, mobile, and digital wallets please check out Genome’s article about e-Wallets.  

As e-Wallets store person’s ID-information, financial data, shipping address, etc., you can send money to another person or company abroad, if they have an electronic wallet, by typing their name and email or a phone number. 

Mobile wallets are more common for P2P and P2B transactions. Some digital wallets can transfer money to credit cards and bank accounts, but others are limited with e-Wallets. Also, be wary that some companies have high fees for international money sending.

Another alternative is SEPA transfers, more on that in the next section.

International bank transfers with SEPA

The Single Euro Payments Area (SEPA) transfers are perfect for those who live and send money within the European Union. Right now, you can send money using SEPA to all the EU countries, as well as to Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, Switzerland, the United Kingdom, and Vatican City State.

To make a transfer, you need to fill in the following information:

  • A beneficiary’s full name;
  • A beneficiary’s IBAN;
  • A beneficiary’s SWIFT code/BIC;

The best part of SEPA transfers is that they take a lot less time, that SWIFT, and are usually completed within a business day. And if a financial institution uses SCT Inst scheme, the transaction takes 10 seconds or less and is available 24/7/365, but has a 100 thousand euros limit. The article about SEPA transfers covers more aspects of its schemes, overall history, and usage. 

The downside is that the SEPA zone covers 36 countries and territories, making SWIFT far more widespread. 

The good news is, that you can use the benefits of both if you have a Genome account. SEPA and SWIFT* transfers are available for our personal and business clients, among other Genome’s services. Starting on August 17th, all the service fees for low-risk Lithuania-based companies will be canceled. The SEPA transfer fees will also be lowered to 0,06 EUR per incoming and 0,11 EUR for outgoing transfers. The full pricing is displayed here.

*Currently SWIFT transfers and currency exchange are temporarily on halt and we are working on restoring them ASAP. For more information on the matter read this blog post.