In today’s digitized world, payments are handled largely by electronic transactions, often via mobile payments. Predominantly, these
transactions are types of bank transfers.
In this blog post, we’re going to go over the basics of online bank transfers: what they are, what happens to your money along the way, and how to make a bank transfer.
A bank transfer or wire transfer is an electronic payment method that allows you to move money between accounts, whether directly or with a card. Customers and merchants use online bank transfers to handle the majority of business and commerce because it is fast, simple, and reliable.
Business owners usually want to make bank transfers to transfer sales income to their business accounts.
Your bank transfer reference number, also called a transaction number or transaction ID, is an individually created reference made after each transaction. The number has anywhere up to 40 characters and is designed to help financial institutions track funds as they move from sender to receiver, especially when transferring internationally, during which more regulations need to be passed.
Senders can also easily pull up bank transfer reference numbers if they haven’t received their goods and need to prove they’ve made the payment. Receivers can also easily report an unexpected withdrawal from one of their accounts or suspicious receival of funds into their account.
The first thing that happens—or doesn’t happen—during a bank transfer is that no physical money is handed over or received. Instead, if you transfer the funds in person, you tap a debit card which extracts funds from your savings account and sends them to the merchant.
There are two different types of bank transfers, during which the transaction information will travel to different points.
These occur when two account holders of the same financial institution are exchanging funds. The responsible financial institution could be a traditional bank like Deutschebank, or a fintech company like Qonto. These are simple transfers, requiring only confirmation from that financial institution.
Long distance fund transfers are more likely to be interbank transfers. Both sender and recipient belong to different banks. Often a processing fee is charged on both ends to complete an interbank transfer.
Once the payment is made, it transfers securely via the SWIFT system. Both your financial institution and the receiver’s financial institution must approve the details of the transaction, making these transfers a more complicated process.
Transfers of funds between account holders belonging to the same financial institution are usually instantaneous, but can take anywhere from 1 to 3 days. If the account holders belong to different banks, the transaction time is more broad and may take up to 14 days.
Of course, it is ultimately up to the financial institution to which you belong. Qonto transfers between account holders are received within 10 seconds after they’ve been sent.
With Qonto, the plan you belong to and whether you’re making a transfer inside or outside the SEPA zone will dictate your transfer costs. Each plan gives you a limited number of transfers, and each additional transfer will incur a small fee, again depending on your plan.
For transfers outside of the SEPA zone, all plans charge a fee of 1% on the amount of the transfer being sent. (please note: this is only for the France region).
Making a bank transfer or payment is simple thanks to modern technology. This is especially true if you have a Qonto account to make payments with the mobile app. There are differences between making transfers that travel inside and outside of the SEPA zone, so let’s look into those.
With your Qonto account or accounts, transfers inside the SEPA zone are very simple. You simply need the recipient’s IBAN. You can then log onto your Qonto app and select transfer to make the transfer.
For a transfer outside the SEPA zone, the procedure is the same, but you’ll need the recipient’s BIC as well. This is because the information concerning the transaction has to go through the SWIFT system for approval.
It’s true that your money is at risk during an online bank transfer. However, the biggest risk is not during the transfer of information but the fraudulent use of your information. When thieves have your bank details, they can initiate and approve transfers on your behalf to their own bank accounts, or send you money to involve you in a scam.
If you have a pending transaction you wish to cancel, you can contact the merchant and ask them to cancel it on their end.
To combat scams, Qonto security ensures that you are the one making the transfer from your app, by confirming your identity on several devices. With 3D Secure (3DS2), you log in to your banking app with your PIN code, then confirm identity on a separate paired device, increasing the likelihood that you are the one making the transfer.
If you notice any strange activity on your account, you can block your card and account instantly from the mobile app, after which you can change your PIN.
