International money transfers often feel simple on the surface: you type an amount, press “send”, and the balance goes down. Then the questions start. Why is the payment “pending”? Why did the recipient get less than you sent? Why does it take a day in one case and days in another? Even the wording can be slippery, because people use “transfer”, “wire”, and “SWIFT” as if they mean the same thing. They don’t.
It helps to accept one calm truth up front: in most modern systems, money does not “travel” like a parcel. Payment systems move instructions, then banks and payment institutions move balances between themselves using agreed-upon rules. Domestic networks are usually built to work smoothly within one set of laws, one currency, and one operating calendar. Cross-border payments have to bridge different currencies, different time zones, different banking holidays, and different compliance filters. That is why global policy groups keep describing cross-border payments as facing persistent frictions around cost, speed, transparency, and access.
Table of Contents
The big picture of how money moves between banks
Most payment systems can be understood through three key concepts: authorisation, clearing, and settlement.
Authorisation is simply permission: the payer agrees that a payment should happen. Clearing is the “plumbing work” before final settlement—transmitting and reconciling payment information, sometimes calculating net positions when systems settle on a net basis. The Bank for International Settlements (BIS) glossary describes clearing as the process of transmitting, reconciling and sometimes confirming transactions before settlement; and if obligations are settled on a net basis, clearing can also include the calculation of net positions.
Settlement is what people usually mean when they say “the money moved”: the point at which obligations between banks (or payment firms) are discharged. Some systems settle transactions by transaction in near real time, while others bundle payments and settle in batches. Batch processing is literally defined as handling a group of orders together.
Once you see this, a lot of everyday “mysteries” become predictable. A payment can be authorised quickly but still settle later because the system is batch-based, because you missed a cut-off time, or because an intermediary has not yet completed checks. And sometimes your bank shows the outgoing amount immediately (for your own account view), while the receiving side can only treat the funds as final once settlement has occurred under that system’s rules.
A second big-picture idea is the difference between domestic and cross-border transfers. In a domestic setting, a country or currency area often has well-established rails and shared standards. In cross-border payments, the world still relies heavily on a network of bank-to-bank relationships (correspondent banking) to access foreign payment systems and currencies. The BIS/CPMI correspondent banking report describes how correspondent banking is especially important for cross-border transactions, where banks access services in different jurisdictions and provide cross-border payment services to customers. At a basic level, it requires the opening of accounts by respondent banks with correspondent banks and the exchange of messages to settle transactions by crediting and debiting those accounts.
ACH, wires, and SEPA
If you are in New York sending dollars to another US bank, or you are in Europe sending euros to another euro-area bank account, you are usually using domestic or regional rails designed for that environment. Three common names you will run into in everyday banking language are ACH, wire transfers, and SEPA.
ACH (Automated Clearing House) is a US system built for high-volume bank-to-bank payments like payroll direct deposit and bill payments. The Federal Reserve explains ACH as a nationwide network through which depository institutions send each other batches of electronic credit and debit transfers—payroll direct deposit is a typical ACH credit example, and mortgage or utility bill debits are typical ACH debit examples. Because ACH is batch-oriented, it naturally behaves differently from real-time systems. Nacha (the rules organisation for the ACH Network) also notes that the ACH Network processes payments for most of the business day and settles payments multiple times per banking day, with settlement occurring when the Federal Reserve settlement service is open (not on weekends and federal holidays). If you want a deeper understanding of the everyday differences people feel between these rails, see ACH vs Wire Transfers: What’s the Difference?
Wire transfers are usually understood as bank transfers that settle individually and with stronger “finality” once processed (particularly in large-value payment systems). In the US, the Federal Reserve describes the Fedwire Funds Service as a real-time gross settlement (RTGS) system where transfers are immediate, final, and irrevocable once processed. That does not mean every “wire” a customer makes is frictionless—banks still have operating hours and cut-off times—but it explains why wires often feel faster and more definite than batch-based ACH.
SEPA (Single Euro Payments Area) is the framework that standardises cashless euro payments across participating countries. The European Central Bank explains that SEPA payment instruments are based on agreed standards and business rules formalised in payment schemes developed and administered by the European Payments Council. For an ordinary SEPA Credit Transfer, the SEPA Credit Transfer scheme rulebook sets an expectation that the beneficiary PSP is credited within one Banking Business Day following receipt of the credit transfer instruction (aligning with the Payment Services Directive approach). SEPA also includes an instant credit transfer scheme. The ECB notes that instant credit transfers make funds available in the payee’s account within ten seconds of a payment order being made. If you want a deeper understanding of how these euro-area transfers work in practice (and why they often feel more predictable than international wires), see How SEPA Transfers Work in Europe.
A small but important mindset shift here is that these names are not interchangeable labels for the same thing. They are different systems (or scheme frameworks) that can have different processing models, different operating calendars, and different data requirements.
SWIFT and correspondent banking in international money transfers
A lot of beginner confusion comes from one phrase: “a SWIFT transfer”. People often picture SWIFT as a pipe that moves money around the world. In reality, SWIFT is better understood as a global messaging network that helps financial institutions communicate payment instructions securely and in a standard format.
SWIFT describes itself as a cooperative run by and for its members (banks and financial institutions) and as a trusted provider of a secure and resilient network for high-value financial communication, with members exchanging millions of messages each day.
So where do the funds actually move? Often, through correspondent banking relationships. The BIS/CPMI quantitative review of correspondent banking makes this unusually clear: in cross-border payments, a correspondent bank provides local account and payment services for banks based abroad, and correspondent banks make their payments by sending SWIFT messages that include instructions to debit or credit their accounts. Depending on relationships in place, several intermediary correspondent banks might be needed for a single underlying transaction (a “payment chain”).
That “payment chain” idea explains several real-life outcomes:
A transfer can be quick when the sending and receiving banks have a direct relationship (fewer links), and slower when it needs multiple intermediaries.
Costs can rise because each intermediary may need operational work and may apply charges.
Transparency can drop because you are no longer dealing with one system’s status updates; you are dealing with a chain.
It also helps explain why the global policy focus keeps returning to cross-border payment improvements. The G20 Roadmap led by the Financial Stability Board and BIS/CPMI frames the persistent issues as high cost, slow speed, and insufficient transparency and access.
If you want a deeper understanding focused specifically on what SWIFT does (and what it doesn’t), see What Is SWIFT and How Do International Wires Work?
Currency conversion and exchange rates
International money transfers become more complex the moment currencies differ. If you send $1,000 from a US bank account and the recipient needs euros, you are not only paying for “moving money.” You are also paying for converting money, and those are separate functions.
A useful way to think about exchange rates is that there is a broad market environment, and then there is the specific rate your bank or provider can offer at the time your transfer is converted. Central bank reference rates can show you a benchmark for market conditions, but they are not necessarily the rate you will get.
The European Central Bank, for example, publishes euro foreign exchange reference rates and notes that these reference rates are meant for information purposes only; the rates are averages of buying and selling rates and do not necessarily reflect the rates at which actual market transactions have been made. Similarly, the Bank of England explains that its spot exchange rate data represent indicative middle market rates (the mean of spot buying and selling) observed by the Bank’s Foreign Exchange Desk in the London interbank market around 4 pm.
Where do fees enter the picture? Usually in layers. The most common layers are:
A transfer fee charged by the sending bank or payment firm.
An exchange rate margin (the difference between a benchmark rate and the rate applied to your conversion).
Intermediary costs in cross-border chains (where multiple banks provide services to complete the payment).
Receiving-side charges or deductions (depending on how the payment is routed and what arrangements apply).
The World Bank’s Remittance Prices Worldwide programme is focused on remittances rather than only bank wires, but it is still a useful window into the reality that cross-border value transfer remains expensive for many people. In its Issue 53 (Q1 2025), the report states that the global average cost for sending remittances was 6.49%. It also highlights that costs vary sharply by provider type and instrument—for example, banks were reported as the costliest type in that quarter.
At a system level, high costs are not just a consumer problem; they reflect structural frictions. The FSB’s cross-border payments work notes that challenges include, among other things, misaligned AML/CFT compliance controls, limited transparency for end-users, and interoperability challenges—each of which can increase operational overhead that ultimately shows up in price.
If you want a deeper understanding that stays focused on the “where did the money go?” question, see International Money Transfer Fees Explained. If you want a deeper understanding of how rate selection and timing affect the final amount received, see How Currency Exchange Rates Affect Your Transfer.
Time, delays, choosing the right method, and staying safe
How long do transfers take
People want a simple answer like “international transfers take three days.” The system cannot honestly promise that. But it can explain why timing differs so much—and what “realistic” usually means.
In the US, ACH is batch-oriented by design. The Federal Reserve describes ACH as a batched network. Nacha describes the ACH Network as operating for most of the business day and settling multiple times each banking day, with settlement tied to Federal Reserve settlement availability (not weekends and federal holidays). In other words, it is built to be efficient at scale, not to clear every transfer instantly at any hour.
Where wires fit in depends on the underlying rail. For Fedwire in the US, the Federal Reserve notes that it is RTGS and that transfers are immediate, final, and irrevocable once processed. That “once processed” phrase matters because customer experience still depends on bank operating hours, cut-offs, and internal checks.
In Europe, SEPA Credit Transfers are designed for predictability within the SEPA area. The SEPA Credit Transfer scheme rulebook states that the amount should be credited to the account of the beneficiary PSP within one Banking Business Day after receipt of the instruction. SEPA Instant Credit Transfer pushes the timeline much further; the scheme rulebook references the ten-second requirement (including what should happen if confirmation is not received within that window).
Cross-border “SWIFT” transfers, however, often sit on top of correspondent banking chains. The BIS/CPMI notes that a single payment can require several intermediary correspondent banks, depending on account relationships, forming a payment chain. More links generally mean more opportunities for time-zone delays, queueing, repair work, and compliance review.
Common reasons for delays
If I’ve noticed one pattern, it’s that delays rarely come from “lost money” and more often come from mismatched expectations about how much checking and coordination is happening behind the scenes.
Cards, bank transfers, and cross-border payments can all trigger different safeguarding and compliance processes. Global bodies explicitly recognise that divergent AML/CFT rules or their implementation can create friction for cross-border payments, which is why FATF has examined the topic in the context of cross-border payment enhancements. The FSB’s Roadmap updates also point to misaligned compliance controls as one of the persistent challenges that slow cross-border payments and limit transparency.
In practice, delays commonly show up when:
A transfer is submitted after a cut-off time and rolls to the next processing cycle.
A payment requires “repair” because account details, bank identifiers, names, or addresses don’t meet the receiving system’s formatting rules.
Intermediary banks in a correspondent chain pause a transfer for screening or clarification.
Weekends and holidays misalign between sending and receiving jurisdictions.
If you want a deeper understanding of this specific “why is it held?” topic, see Why International Transfers Get Delayed. And if you want a deeper understanding with a pure procedural walkthrough (kept separate from this pillar on purpose), see How to Send Money Internationally Step-by-Step.
Choosing the right payment method without guessing
This is where many guides start recommending products. That is not the point here. The calmer approach is to choose a payment method by asking what the system must optimise for in your situation, because payment rails make different trade-offs.
If certainty and finality matter most (for example, a high-value settlement between institutions), RTGS-style rails exist for that purpose. If low cost and predictable bulk processing matter (for example, routine domestic payments at scale), batch systems like ACH exist for that purpose. If you are working in euros within SEPA, the scheme structure is designed to make cross-border euro payments behave more like domestic euro payments, including a one-business-day execution expectation for standard transfers and near-real-time expectations for instant transfers.
If you want a deeper understanding of the everyday trade-offs between rails people use most often, see Bank Transfers vs Card Payments vs Digital Wallets.
Digital wallets and basic safety
Digital wallets often reduce friction at the “front end” (what you see on your screen), but the underlying system still has to protect customer funds, manage risk, and follow rules. In the UK, the FCA explains that authorised payment institutions and electronic money institutions must comply with safeguarding requirements. The FCA has also been explicit that funds held by payment and e-money firms are not directly protected by the Financial Services Compensation Scheme (FSCS) in the way bank deposits are; instead, firms must safeguard funds, and failures can create the risk of losses or delays in returning customer money. This is not a reason to panic. It is simply the correct mental model: a wallet balance may be regulated and safeguarded, but it is not automatically identical to a bank deposit.
For personal security, the simplest safety habits are still the most effective, because most fraud attempts aim at your access rather than at “hacking the payment network”. The UK National Cyber Security Centre explains that setting up 2-step verification makes it harder for criminals to access online accounts even if they know your password. That single habit reduces the chances that someone can initiate payments from your accounts, whether those accounts are bank logins, email (often used for resets), or wallet apps.
If you want a deeper understanding tailored to cross-border income flows (without turning this pillar into a freelancing playbook), see Best Ways for Freelancers to Get Paid Internationally. If you want a deeper understanding of the “I earn in one currency but live and spend in another” reality, see How to Manage Multiple Currencies in One Account.
Summation
International money transfers feel stressful when you expect them to behave like a text message: instant, free, and perfectly transparent. Payment systems were not built like that. They were built as layers of rules that balance speed, safety, cost, and legal certainty—sometimes beautifully, sometimes imperfectly. The more a payment crosses borders and currencies, the more layers it tends to touch, especially when correspondent banking chains are involved.
Once you grasp the core ideas—batch versus real-time, clearing versus settlement, messaging versus money movement, and benchmarks versus applied exchange rates—the system becomes easier to understand. And when you go deeper into any one area, the supporting articles are there for focused clarity rather than more noise.