THE TRANSFER

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Credit transfers are the main means of payment used in international trade. It is an evolution of the cheque which, thanks to communication and information technologies, has experienced strong growth.

A wire transfer is an order from the buyer or importer to his bank to transfer an amount of money to the seller's or exporter's account. To do so, the buyer must provide the necessary details for the transfer, such as the international standard bank code (BIC) and the account number in international standard format (IBAN) of the seller.

The transfer can be carried out electronically, which increases the speed and security of the process, reduces data errors and allows integration with the company's own accounting and management mechanisms.

For the seller, the transfer is a universally used means of payment, with lower costs, immediate availability of funds, speed and management by online banking. However, he has no control over the time of payment.

For the buyer, the transfer is a universally used means of payment, with lower costs, initiative in payment, issuance by online banking and security in immediate payment.

It is recommended that both buyer and seller use the international standards BIC and IBAN for transfers to speed up the receipt of payments and reduce costs.

In short, wire transfer is a fast, secure and inexpensive way to make payments in international trade. It is important that both the buyer and the seller are informed of the requirements and standards necessary for its proper use.

Bank transfers have several advantages and disadvantages that can affect both the buyer and the seller.

Some of them are:

ADVANTAGES

• Speed: transfers are made in a matter of hours or days, which makes them faster than other means of payment such as cheques or bills of exchange.
• Security: transfers are a secure method of payment, as they are made through banks and are subject to regulations and security measures.
• Lower cost: transfers are usually lower cost compared to other means of payment such as letters of credit.
• Immediate availability of funds: once the transfer has been received, the funds are available for immediate use.

DISADVANTAGES

• Lack of control over the timing of payment: the seller has no control over when the payment will be made, which can be a problem if he needs the funds urgently.
• Data errors: errors in the information provided for the transfer may delay or even cancel the transaction.
• Geographical limitations: transfers may have geographical limitations, which may make international transactions difficult in some cases.
• Requires access to online banking: to make or receive transfers, access to online banking is required, which may be a problem for some customers or suppliers who do not have access to the internet or online banking services.

In general, credit transfers are a safe and fast way to make payments, but it is important to consider the advantages and disadvantages to determine whether it is the best option in each specific case.

Undoubtedly, the main means of payment used in international trade is pass-through, with almost absolute dominance in certain segments of trade, but virtually non-existent in others. 

It is still a evolution of the cheque which, stripped of many of its disadvantages and with the development of communication and information technologies, has experienced a exponential growth. 

Since the advent of the telegraph, the transfer has been a highly electronic means of payment, but it was not until the emergence of SWIFT in the 1970s that credit transfers took off as an electronic payment mechanism, from just over 100,000 transfers per month in 1977 for the whole world to more than 16 million per day in 2019. 

Naturally, SWIFT is not the only cause of this explosion, but is primarily attributable to the sharp increase in international trade since the 1980s, but SWIFT has been a perfect ally of this globalised economy. However, SWIFT has been a perfect ally of this globalised economy, It was not until the advent of the Internet that the electronic circle was closed.

Indeed, until then, the instruction of the originator and the notification of the beneficiary were not strictly electronic, SWIFT acting only as a communication system between banks.

When the transfer is electronic from start to finish:

• Increase the speed and security.
• Decrease drastically the errors in the data.
• It allows the integration with the company's own accounting and management mechanisms.

ADVICE AND RECOMMENDATIONS

• For the seller universal use lower cost immediate availability of funds quickly managed by BS Online security - no control over the time of payment.
• For the buyer universal use lower cost initiative in payment issuance by BS Online security - immediate payment.

PRACTICAL ADVICE

When you have to charge by transfer, do not forget to mention to your customers neither the international standard bank code or BIC (Bank Identifier Code) (for Banco Sabadell it is BSABESBB) nor your account number in international standard format or IBAN (international bank account number).

This will speed up the receipt of transfers and help to reduce costs. The same applies to payments to be made by credit transfer, especially in the European Union environment.