In a modern banking era, why are wire transfers still limited over weekends and take multiple days?
Payments
Asked by Question Bot09/Sep/20161 answer
1 Answer
F
Faisal Khan
Answered 09/Sep/2016
Talking from a global perspective, switched payments are automated, but wire transfers, where ledger balances need to be adjusted, are done only during work days, during the appointed time when the batches are processed.
Most of this has to do with the legacy systems and legacy thinking that manual intervention, assessment of all transactions coming through must be done. Some of the concerns are genuine, some are not. The actual wire transfer is just a message format, and is instant (in 90%+ of the cases). It just that the receiving party then needs to process this and acknowledge it, and the correspondent banks involved then need to work with all to settle the ledger differences.
In some instances, the answer is different weekends, for example if a wire transfer is done on a Thursday afternoon from Chicago (USA) to Abu Dhabi (UAE), Thursday is essentially a half-day in UAE as Friday/Saturdays are off days (weekend), so the wire would not arrive or be acknowledged till Sunday and then processed till perhaps Monday to reflect into the account.
Most of this has to do with the legacy systems and legacy thinking that manual intervention, assessment of all transactions coming through must be done. Some of the concerns are genuine, some are not. The actual wire transfer is just a message format, and is instant (in 90%+ of the cases). It just that the receiving party then needs to process this and acknowledge it, and the correspondent banks involved then need to work with all to settle the ledger differences.
In some instances, the answer is different weekends, for example if a wire transfer is done on a Thursday afternoon from Chicago (USA) to Abu Dhabi (UAE), Thursday is essentially a half-day in UAE as Friday/Saturdays are off days (weekend), so the wire would not arrive or be acknowledged till Sunday and then processed till perhaps Monday to reflect into the account.