Rivermate | Product owner - Andrew Simon

Global Work Glossary

What is a local bank transfer and how does it work?

A local bank transfer involves electronically moving funds from one bank account to another within the same country or region. It can extend to international transactions, depositing funds into foreign accounts, known as international ACH or Global ACH. This method facilitates efficient and secure cross-border payments, gaining popularity globally.

Advantages of Local Bank Transfers

Local bank transfers are favored for peer-to-peer payments, offering direct money transfers for online transactions. They ensure speed and affordability, simplifying payment processes for products and services. Moreover, these transfers enable companies to make international payments to their workforce efficiently. The convenience and security of local bank transfers further enhance their appeal, eliminating the need for intermediaries and reducing the risk of fraud.

How Local Bank Transfers Operate

Unlike traditional international bank transfers, local bank transfers utilize peer-to-peer networks instead of relying solely on banks. When initiating a transfer, individuals or businesses opt for money transfer services such as Wise or PayPal. These platforms match transfer requests, utilizing funds from local accounts to credit recipients' accounts in the local currency.

Cost Comparison

In terms of cost, local bank transfers outperform international wire transfers. While the latter incur fees ranging from $35-50 USD and take 1 - 5 days to clear, local transfers cost up to $3-25 USD in fees and clear within 2 business days. Thus, local bank transfers offer a more economical and efficient payment solution.

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