There are many reasons why a transfer may not reach its destination in the expected timeframe. Most of the time, these reasons are easy to identify and solve but they can unnecessarily strain relationships with your beneficiaries (penalties for payment delays, additional transport or storage fees...) or impact stock supply (delivery delays, shortages...).
If a wire has not arrived within 4 working days of its execution date, it is likely that it has been blocked by an intermediary bank or rejected by the beneficiary bank.
A quick reminder on the international banking system
The international banking system relies on intermediary banks (also called correspondent banks). Sending a payment from an issuing bank to a beneficiary bank is indeed rarely a direct process:
A payment can be sent by bank A to Bank Z only if they have an established correspondent banking relation. Otherwise, it will have to go through a correspondent bank in order to reach bank Z.
A payment in a given currency must necessarily go through a bank located in the country of this currency: this is because the funds must go through a bank which holds an account with the central bank governing the currency monetary policy .
Each of these banks is responsible for verifying and validating the payment against anti-money laundering and counter-terrorism financing regulations. International payment delays are mostly made of administrative time (either system or human processing).
Some reasons that might explain payment delays
Error on the beneficiary bank details
Mistakes can occur when adding a payment beneficiary – errors on the account holder’s name or their account number.
When the payment reaches the beneficiary bank, it may be blocked due to the mismatch between the actual beneficiary details and those in the payment.
If the beneficiary bank is not able to reconcile the payment details with those it holds for the beneficiary, it will reject the payment.
Compliance reason (international payments)
Payments always go through several screening systems to comply with anti-money laundering and counter-terrorism financing regulations.
Intermediary banks screening systems may raise a flag and further check the payment details even if the issuing bank did not.
In that case, the issuing bank will receive a message (via the SWIFT network) with the information requested by the intermediary bank to clear the flag.
Technical issue
Some payments are blocked because the beneficiary bank is not reachable.
It usually happens when a SWIFT payment is sent to a bank that only accepts SEPA payments (or vice versa).
In case of rejection, the beneficiary or intermediary bank will end up returning the funds.
This operation is different from an international payment and requires intervention from several players (issuing person and their bank, beneficiary person and their bank). For this reason, it may take up to 30 days for the returned funds to be credited back to their original account.