Until now, sending money to Euro bank accounts has been slow. It could take days, especially if you made a payment on a Friday. That’s about to change. At TransferWise, we’re committed to Mission Zero - lowering fees - and to making your transfers instant. So we’re excited to announce that we can now send payments to a growing number of Euro bank accounts in just a few seconds.
Here’s how it now looks when I send GBP to a EUR bank account:
For the last ten years sending money around the Eurozone has been done via a low-cost, pan-European payment type, called a Single Euro Payments Area Credit Transfer (SEPA CT). It was introduced as a low-cost way to send Euros between banks in the Euro area. It was a huge improvement to what existed before, but there’s one major downside: it can be very slow and inconsistent.
For example, if you sent money to a Euro bank account on Friday, it could arrive as quickly as a few hours or you could be waiting until Monday morning. This made it challenging for us to let you know exactly when your money would arrive at its destination. That wasn’t just a problem for TransferWise customers, it affected anyone sending money between banks across the Euro area.
Our customers have continuously informed us that knowing exactly when their money would arrive in the recipient bank account is really important to them, and we have spent a lot of time and resources trying to give you the most accurate estimate possible. My colleagues from the Speed Team wrote a bit more about this.
Late last year, banks and other players in the payment industry came together to try and fix the problem. They came up with a new payment scheme: SEPA Instant. Your money doesn’t only arrive at its destination within seconds, it can also be sent 24/7, even on bank holidays!
We’re proud to say that we are one of the first fintech companies to sign up and roll out instant Euro payments to our customers. This means that as soon as we send out your Euros to another bank who has also signed up to this scheme - the money will be in your account in seconds. Compared to the old timeline of one business day, this is about 10,000% faster!
The downside? Unfortunately, the scheme is still very new, and only about 20% of Euro area banks have signed up to be able to receive instant payments. In some countries, not a single bank has signed up. This means that unless you are sending to a bank that’s signed up, you won’t be able to receive instant payments. The scheme isn’t mandatory for banks to join, but we believe doing so is the right thing for our customers as it gives them access to the fastest payments possible.
We encourage all banks and other payment service providers across the Euro area to adopt the new instant scheme as soon as possible so everyone can benefit from lightning fast euro payments! As soon as a bank joins the scheme, we’ll be able to send Euros to them instantly.
At TransferWise, we want to make money move without borders, which means making sending money across Europe instant, transparent, convenient and eventually free. One day, we want to make sending money from one country to another as easy as sending an email.
Until recently, only banks could have direct access to the payment schemes to move money around the world. This meant that for everyone else to make payments, they needed an account with a commercial bank. However, we have been working hard to break this monopoly. In April this year, we became the first non-bank to have access to a central bank account in the UK, and we have now done the same in the Eurozone, integrating with the Bank of Lithuania. This means we aren’t paying a commercial bank’s markup on these payments, helping us drive down our costs as low as possible.
Arun Tharmarajah - Europe Banking
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