Delay in transferring funds across borders

Nature

The delay in transferring funds across borders refers to the prolonged time it takes for money to be sent and received internationally. This issue arises from various factors, including regulatory compliance, differing banking systems, currency conversion processes, and the involvement of multiple intermediaries. Such delays can hinder international trade, affect personal remittances, and create financial uncertainty for businesses and individuals. The inefficiencies in traditional banking methods and the lack of standardized protocols further exacerbate the problem, prompting the exploration of alternative solutions like blockchain technology and fintech innovations to facilitate faster and more reliable cross-border transactions.

Incidence

A 1994 EU survey revealed that the average time for executing cross-border payments is 4.8 working days. Averages in different member states range from 3 to 8 working days, depending on the country and institution involved. At the individual transaction level, time performance among a sample of 34 sender banks ranged from sme-day execution in eight cases to 21 working days in 2 cases.

Claim

93 percent of all EU companies have nine employees or fewer and simply cannot afford to trade across frontiers with the current obstacles to cross-border payments such as delays, double-charging and loss transfers. The cross-border component of all EU bank transfers currently accounts for only between one and two per cent of all EU bank transfers but would increase substantially if customers were offered better service and the costs were less prohibitive.

Counter-claim

The notion that delays in transferring funds across borders is a significant problem is vastly overstated. In an age of instant communication and digital banking, these delays are often minimal and manageable. Businesses and individuals can plan accordingly, and the benefits of regulatory oversight far outweigh the inconveniences. Moreover, the global financial system's complexity ensures security and compliance, making these delays a minor inconvenience rather than a pressing issue. Let's focus on more critical challenges instead.

Narrower

Irregular international money orders

Aggravated by

Deliberate delays in clearing financial transfers

Excessive cost of transferring funds across borders

Strategy

Increasing mobility of funds across borders

Value

Delay

SDG

Sustainable Development Goal #9: Industry, Innovation and Infrastructure

Metadata

Database

World problems

Type

(E) Emanations of other problems

Biological classification

N/A

Subject

Commerce » Finance

Communication » Communication

Government » Frontiers

Societal problems » Delay

Content quality

Unpresentable

Language

English

1A4N

J5131

DOCID

12051310

D7NID

153751

Last update

Oct 4, 2020