How does an express (urgent) international wire differ from a standard wire transfer?
Payments
Asked by Question Bot05/Jan/20151 answer
1 Answer
F
Faisal Khan
Answered 05/Jan/2015
Anything Urgent usually means it is pre-funded and is being settled before the normal net-deferred settlement times.
If a regular wire transfer from say US to Thailand takes 1.5 days, it is because the two banks that are processing the wire, are settling with each other.
If the payment in Thailand has to be made before the settlement, then it essentially means that the Bank in Thailand is loaning out the money in advance, before it receives its promised amount from the US.
This loaning out, has a cost associated with it, and hence the premium.
You can learn more about the settlement process from: Faisal Khan's answer to How does the settlement of payments work in banks? Specifically, how do payment systems that are connected to multiple banks actually settle the amount between two banks?
If a regular wire transfer from say US to Thailand takes 1.5 days, it is because the two banks that are processing the wire, are settling with each other.
If the payment in Thailand has to be made before the settlement, then it essentially means that the Bank in Thailand is loaning out the money in advance, before it receives its promised amount from the US.
This loaning out, has a cost associated with it, and hence the premium.
You can learn more about the settlement process from: Faisal Khan's answer to How does the settlement of payments work in banks? Specifically, how do payment systems that are connected to multiple banks actually settle the amount between two banks?