Bank transfer: Characteristics, types and sending methods

Bank transfers are a traditional and recurrent method of payment, so it is important to know and identify the types of bank transfers available and how they work. Read on to find out more about the types of bank transfers and how to make them correctly!

1. Types of bank transfer

A bank transfer can be defined as the operation of sending money from the sender’s account to the account of a recipient or beneficiary.

There are three variables or indicators that segment the types of transfers:

• Geographical area: Depending on the destination of the transfer, it can be domestic or international:
  • Domestic: The transfer by the sender to the recipient takes place within the domestic territory. It is usually free of charge when the banks included in the transaction are the same; if they are different, commissions may be charged depending on the bank.
• International: The sender and the beneficiary are located in different countries. Therefore, the international transfer rate varies according to the geographical area and the currency used:
  • SEPA type: This type of transfer occurs when the sender and the beneficiary are located in different countries within theSEPA area (Single Euro Payments Area), which comprises 36 European countries. The SEPA zone introduced the use of the IBAN code instead of the CCC, which makes transfers faster, easier and more secure . Fees, if any, will depend on each bank.
  • SWIFT type: In this case, the international transfer takes place when the sender or beneficiary is located in a country outside the European Union, which entails sending the transfer in a currency other than the euro. This type of transfer usually involves the payment of a fee, which varies depending on the type of transfer:
    • SHA transfer: The cost of the fee is paid equally between the sender and the receiver of the transfer.
    • OUR transfer: the fee generated by the transfer is fully covered by the sender.
    • BEN credit transfer: In this type of transfer, the cost of the fee is borne by the beneficiary of the transfer.
• Frequency: The type of transfer also varies according to the frequency with which it is made:
  • Punctual: The most common transfer, it occurs at a specific time with the intention of reaching the recipient as quickly as possible.
  • Periodic: Transfers scheduled by the sender to take place at a certain frequency: monthly, annually, etc.
• Term: The term establishes these types of transfer, depending on the need and speed with which the money is required:
  • Ordinary: The most common transfer term. It usually takes between 1 and 2 working days between national banks, and the transfer can even be instantaneous if it is made at the same bank. For international transfers, it can take up to 5 days.
  • Urgent: In this type of transfer, the term is usually a few hours, with an increase in commissions for this service.
  • Immediate: The sending of the bank transfer is instantaneous, even between countries in the SEPA area. An additional fee is charged for this service.

2. Sending time for bank transfers

The time it takes to send a bank transfer is determined by the type of transfer and the timeframe assigned. These are the main types of transfers and the time it takes to reach the recipient:

• Ordinary transfers are usually effective within one working day, depending on the bank. If the transfer is made to an account in the same bank, it usually arrives almost instantly.
• Urgent national credit transfers are effective the same day they are issued.
• Ordinary SEPA credit transfers are effective within one working day.
• Immediate SEPA credit transfers are effective instantly.
• International transfers (SWIFT) take between 2 and 5 days.

3. Details for making a bank transfer

When you are about to make a bank transfer, you will have to enter the following data to carry out the operation:

• Choose type of transfer: We will have to choose whether the bank transfer to be made is one-off or regular, as well as the period of time in which we wish it to be made.
• Account number (IBAN): The recipient account that will receive the transfer funds. It consists of a total of 24 digits: 20 characters for the current account, 2 characters for the country code of the account and 2 characters for the control code.
• Amount: Amount we wish to transfer to the recipient.
• Concept: Usually includes one or two words defining the reason for the bank transfer.

It is important to make a final check of the data entered to avoid errors and complications as, in most types of transfer, they cannot be cancelled once the transfer order has been issued by the bank.

Therefore, if the details are entered incorrectly when making a transfer, there are a few options for requesting a refund:

• If you have contact details of the beneficiary, a good option is to establish a contact channel to arrange the return of the transfer amount.
• If you do not have the beneficiary’s contact details, the other option is to contact your bank to arrange the return of the transfer amount with the beneficiary’s bank, known as a chargeback. Please note that in order for the chargeback to take effect, the beneficiary must accept the return of the funds from the transfer to the recipient’s account.

If the transfer is domestic, the maximum period for requesting cancellation is 10 working days. If the transfer is international, there is no way to cancel it, unless the recipient is contacted and voluntarily returns the amount of the transfer.

4. How to make a bank transfer

Once you have collected the necessary data to make the transfer, it is time to decide how to make the transfer. There are the following options to carry out this operation:

• Online: Online transfers are easy, convenient and quick to make. You only need to have the relevant details of the recipient, enter the customer area of your bank, enter the information correctly, paying special attention to the introduction of the 24 digits that make up the IBAN of the recipient’s account. Finally, it is necessary to follow some simple security instructions to complete the transaction correctly. Taking advantage of the benefits offered by digital tools, using the Bizum application is a good option, as it is integrated in most banking institutions (within online banking), as well as offering practical and simple usability and having a high level of users.
• Bank branch: Before the advent of new technologies, this was the most common option, although nowadays it is impractical as it involves travelling to your bank’s branches and queuing, which slows down the process a lot.
• Cashier: This is an impractical option, but it is still an option if you do not have the digital tools to make the bank transfer. To do this, you have to take your card or bankbook and go to a cash machine at your bank to make the transfer. However, in the age of digitalisation, this option is practically obsolete and is becoming less and less common.

5. How is the Treasury supervising certain bank transfers?

Most often, the transfers made go unnoticed in the eyes of the tax authorities, although if certain limits are exceeded, such as the amount of the transfers, the tax authorities’ alarms may go off. These would be some of the factors that could lead to the Treasury’s intervention:

• Tax returns: When bank transfers are made, especially if they involve large amounts of money, they may need to be reported in the tax return. This may include international transfers, transfers between your own accounts or transfers received from third parties.
• Income tax: If income is received through bank transfers, it may need to be reported and taxed. This applies both to transfers received from customers or employers and to transfers of other income, such as investment income.
• Money laundering control: Banks are obliged to report certain suspicious transfers to tax authorities, including the Inland Revenue, as part of efforts to prevent criminal activities such as money laundering.
• Audits and investigations: The Inland Revenue may use information from bank transfers in the course oftax audits and investigations. If there are suspicions of tax evasion or other irregularities, the Inland Revenue may request information from banks about transfers made or received by a particular person or entity.

It is important to note that tax laws and regulations may vary from country to country. It is advisable to consult country-specific regulations or speak to a financial advisor for more precise and detailed information on how bank transfers may impact on the tax control carried out by the tax authorities or the competent body in the country where the transfer is made or received.

6. Security and data protection in bank transfers

The security and protection of personal and financial data are fundamental aspects to be taken into account in bank transfers. As more individuals and businesses engage in electronic transactions, it is crucial to ensure the confidentiality and integrity of sensitive information.

Here are some of the methods and measures in place to strengthen the security of bank transfers:

• Data encryption: Financial institutions use strong encryption protocols to protect information transmitted during bank transfers. Encryption converts data into a format that is unreadable to unauthorised third parties, making unauthorised access difficult.
• Authentication and verification: Bank transfer systems typically require strong authentication measures to ensure that only authorised persons can access and perform transactions. This may include passwords, security codes, biometric identity verification (such as fingerprints or facial recognition) or other two-factor authentication mechanisms.
• Fraud protection: Banks implement security measures to detect and prevent fraudulent activities in bank transfers. They use advanced algorithms and monitoring systems to identify suspicious patterns or unauthorised transactions, allowing quick action to stop and mitigate fraud.
• Network security: Financial institutions invest in secure network infrastructures and intrusion protection systems to prevent cyber attacks and ensure data integrity. This involves the use of firewalls, intrusion detection systems and other security technologies.
• Regulatory compliance: Financial institutions are subject to strict regulations that protect the privacy and security of their customers’ data. These regulations, such as the European Union’s General Data Protection Regulation (GDPR), set specific standards and requirements for information security and personal data protection.
• Information and prevention notices: Financial institutions also play a crucial role in advising their customers on security best practices for bank transfers. They provide recommendations on the use of strong passwords, the protection of electronic devices, and the identification and prevention of possible fraud attempts.

In short, security and protection of personal and financial data are essential in bank transfers. Banks employ a combination of security technologies and protocols, along with compliance measures, to ensure the confidentiality, integrity and authenticity of transactions.

But while banks implement this set of stringent security measures, it is important that users also take precautions to ensure the security of their banking transactions. Some recommendations include:

• Keep operating systems and applications on devices up to date.
• Avoid accessing bank accounts on unsecured public Wi-Fi networks.
• Be cautious when providing personal or financial information online.

7. Advantages of digitisation in banking

There are certain banking operations that require greater complexity to do them correctly, so it is necessary to have the right digital tools to automate the process and guarantee its success.

Tickelia is the end-to-end solution that helps companies in this task, as it offers an automatic bank reconciliation of business expenses, either with conventional payment cards or with Tickelia VISA cards.

Another relevant feature of this solution is the integration with ERP&CRM systems and payroll management software to facilitate and automate the accounting process, avoiding calculation errors and mismatches.

Performing a correct bank reconciliation allows you to make better, more strategic decisions, manage resources properly and have an overall balance of the company’s accounts.

Discover the advantages that Tickelia offers and how it allows you to have a better control of your expenses by clicking on the following banner!