Can international bank transfers be reversed?

If you are wondering if international bank transfers can be reversed, or if international bank transfers can be cancelled, then you need to keep reading. In short, the answer is no, international bank transfers cannot be reversed – but there are a few exceptions that can return your money.

What is a bank transfer?

A bank transfer is a way of sending money from one account to another. They are often known as wire transfers, which has become a very general term for sending money.

A wire transfer got its name in 1872 when Western Union transmitted the first bank transfer message via telephone wire, signalling the recipient bank to release funds. Prior to this, people would use cheques and mail to transfer funds, which could take a long time and was not always trustworthy, particularly if you were sending large amounts of money.

The benefits of a wire transfer are clear:

• Money is available quickly to the recipient, internationally and domestically
• The transaction is safe, as it cannot be intercepted
• The receipt of the money can be confirmed

How does a bank transfer work?

Essentially, this same system of a wire transfer is still used, although now of course uses computer systems and involves more regulations. These transfers will take place between two banks, or via a money transfer service.

Wire transfers between banks, in their basic form, will generally follow this process:

1. The sender pays for the transaction upfront to their bank
2. The bank then sends a message over to the recipient’s bank
3. The recipient’s bank then deposits its own funds into the recipient’s account
4. Once the money has been deposited, the sender’s bank will pay the recipient’s bank

Technically, no money has been ‘sent’ – only in agreement has a payment been settled.

How do international bank transfers work?

Sending money abroad is slightly more complicated than sending money domestically. This is mainly down to exchange rates between currencies, which are constantly fluctuating.

For example, if you wanted to transfer £100 to a friend in the US, they would need to receive the equivalent cash amount in dollars. At the time of writing, this would be $121.85. However, if you just sent the £100 and then there was a sudden spike or crash in the US economy, it wouldn’t be possible to determine how much your recipient would actually receive.

Therefore, to prevent this from happening, banks will employ a process to ensure that the trade is ‘locked in’ so that senders will know exactly how much they will be transferring.

Your bank or transfer service will need to know the currency you are sending and the currency you want the money to be received in. You will then be presented with an exchange rate, which if you accept, will then trigger the bank or transfer service covering the position. This way, the money being sent between banks is now confirmed, as the currency has already been bought at a fixed price.

One of the downsides to this is, in some cases, if you do not have the funds required to settle the transfer, then the transfer may need to be called off. The bank or transfer service will then need to exchange the currency back, which if the exchange rate has worsened, will mean that you need to pay the difference.

Can international bank transfers be cancelled?

So, as you can see, the process is not as simple as being ‘cancelled’. A bank transfer (international or domestic) works as a one-way process.

Once the process has been completed, nothing can be done to reverse or cancel the process. The recipient’s bank will have already given the money to the recipient and the deal completed. The process can be cancelled early on (and declined in some cases if you do not have enough money to cover the costs), but once a transaction has theoretically been ‘pushed through’, it cannot be pulled back. To receive the money back again, the recipient would need to send the money back to you via their own international bank transfer.

Bank transfers also need to clear through an ACH (Automated Clearing House) to make sure that nothing fraudulent is going on. This is why bank transfers take time to process, and take longer to transfer internationally, as they need to go through two ACHs – one at home and one in the country you’re sending the money to.

It’s for this reason that cancelling international bank transfers is complicated. There are many more processes than simply just sending the money over.

The process is also completed through secure systems to ensure that everything is legitimate and that there is sufficient communication between banks – one of the most common methods being SWIFT, which adds a layer of complication to a cancellation.

The Dodd-Frank Wall Street Reform of 2010 is one thing that could help someone looking to cancel their international bank transfer. This rule states that anyone sending money usually has the right to cancel their wire transfers for free, but only if they do this within 30 minutes of their original transfer request. However, this is not a guarantee.

What is SWIFT?

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is one of the most widely used systems in the world for facilitating wire transfers. The system will generate a unique code of 8 to 11 characters, which identifies the recipient bank, country, and branch. The IBAN (International Bank Account Number) code system is also used frequently and is a very similar system.

What if the bank makes a mistake with the transfer?

In this case, the bank should return your money. The process is not being reversed, but instead, the bank will make a request to the recipient bank that the money be refunded. Either way, the bank should return the money to you, as they are liable for the mistake.

So, can international bank transfers be reversed?

To summarise, international bank transfers cannot be ‘reversed’. The process is far more complicated than this and acts as more of a one-way chain of events. Once you have set an order for the international bank transfer to happen, the information will be carried forward and processed through a strict system. To reverse the process would be impossible.

As mentioned, in some cases, you may have up to half an hour to cancel your request, thanks to a new reform passed in 2010 in the wake of the 2008 crash, but this is not always possible. The best course of action is to ensure that you have the correct details from the recipient, and to double-check that you have entered them correctly.

If you have sent money to the wrong person through your own error, then this can be negotiated with the recipient of the money, however this can be difficult if they are anonymous or even non-compliant.

Why you should use CurrencyTransfer for your international bank transfers

With CurrencyTransfer, the complication and stress of an international bank transfer is taken care of. We make things easier for you by using our network of FCA-regulated payment partners to provide you with the best options for your international bank transfers.

We allocate our clients a Personal Currency Concierge to help you find the best solution for your unique transfer requirements. Save time and money for your business or personal international payments and open an account today.