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How Long Does an Electronic Funds Transfer Take?

7/29/2021

Wire transfers, electronic banking, and online financial services have made money transfers faster and more convenient than ever before. And though some electronic funds transfers happen almost instantly—meaning the money is debited from the sender and credited to the recipient as soon as the transaction is completed—that is not always the case. Electronic funds transfers take as little as a minute to five days to process, depending on several factors.

How Does An Electronic Funds Transfer Work?

An electronic funds transfer is a secure electronic movement of funds from one account to another. It can be done by both individuals and large entities. And it can be processed through different channels: banks, remittance centers, and online financial services.

To make an electronic funds transfer, the sender provides information about himself or herself, the recipient, and the amount to be transferred to the agency that will initiate the transfer. Nowadays, the amount can simply be debited from the sender’s account. But you can also deposit the amount, especially if you are sending it via a remittance center. 

The agency then sends this information through a network such as FedWire or SWIFT for clearance. Once the funds are cleared, the amount is credited to the recipient’s account—that is if it’s done via a bank-to-bank electronic funds transfer (aka bank wire transfer) or an online financial service where both accounts exist. If the transfer is done via a remittance center, the recipient must show identification to receive the money.

What Is The Timeframe For Electronic Funds Transfers?

Electronic funds transfers can take between a few minutes to several days for the amount to be taken from the sender’s account and deposited into the recipient’s account. While most electronic fund transfers have become nearly instant, bank-to-bank transfers and remittance transfers still take one to three days to process domestically and three to five days to complete for international transactions.

What Factors Affect The Speed Of Electronic Funds Transfers?

Several factors affect the speed at which electronic funds transfers take place, from the time the transaction was made, to the location of where the transfer is being sent.

Network

The size of a transfer agency’s network affects the transfer speed because this impacts how many stops the money has to clear before reaching the recipient. The more extensive the network, the faster the cash moves.

Time Of Transfer

Many transfer services operate on specific hours, usually banking hours. So transactions made outside of this time will not be processed until the following day; this is also true for transfers initiated on weekends and holidays. You’ll typically need to wait till the next business day for the transfer to begin processing.

That said there are some electronic banking and online financial services that can perform transfers regardless of time.

Location

Domestic electronic fund transfers are processed faster than international funds transfers, especially when different banks are involved. This is because individual banks may not be able to complete the transaction directly when they are in different countries. In this case, an intermediary bank must act as a bridge between them to securely complete the transfer.

Summary

As you can see, there are multiple factors that affect the speed at which electronic funds can be transferred. While some transfers may be processed in a matter of minutes, others can leave you waiting for more than a few days. That’s why many people are now looking for ways to transfer money instantly and effortlessly. With the Cashero App, you can do just that. We make it easy to transfer money to other Cashero users, in more than 160 countries around the world.