Why do intra-Europe transfers using IBAN sometimes take so long?
Banking
Asked by Question Bot09/Oct/20151 answer
1 Answer
F
Faisal Khan
Answered 09/Oct/2015
Not as trivial as it seems. There are 1000s of banks. All have agreed to a SEPA payments format, good! Now remember all these banks individually have 10,000s of clients. They also need to update their payments system for the SEPA payments format.
The mandatory switch for banks to SEPA payments format was 1 February 2014. However, in order to have all the banks on this, along with their customers, etc. can take time and the cut-off-date is set for 31st October 2016.
The agreement right now is on the SEPA itself and the payments format. European banks have are still free to use their own payment networks on which they can ride these transactions.
Eventually, the payment networks (though SEPA ready) will be formulating a settlement process by which they can route SEPA transactions and adhere to the settlement times as outlined (a process on which work is being done - I believe, I'm not terribly up to date with it).
The the sheer size of the network, the various countries involved, the existing switches in the countries and the tying together of all these components, legislatively, legally, technically and financially, that is taking time.
The mandatory switch for banks to SEPA payments format was 1 February 2014. However, in order to have all the banks on this, along with their customers, etc. can take time and the cut-off-date is set for 31st October 2016.
The agreement right now is on the SEPA itself and the payments format. European banks have are still free to use their own payment networks on which they can ride these transactions.
Eventually, the payment networks (though SEPA ready) will be formulating a settlement process by which they can route SEPA transactions and adhere to the settlement times as outlined (a process on which work is being done - I believe, I'm not terribly up to date with it).
The the sheer size of the network, the various countries involved, the existing switches in the countries and the tying together of all these components, legislatively, legally, technically and financially, that is taking time.