The payments industry is full of noise about various payout methods, and it can be tricky to discern between fact and fiction. As we detail in our series, "Transpay's Ultimate Guide to Local Bank Transfers," we define a Local Bank Transfer as a payment structure that makes it possible to send funds from a company’s bank account directly into a recipient’s bank account, in the local currency of the recipient.
We believe that the Local Bank Transfer methodology offers unrivaled benefits that enable you to deliver funds in markets around the globe, tailored to each market's unique local payments structure. In addition, Local Bank Transfers offer a high degree of security and a low degree of cost and hassle
That's what a Local Bank Transfer is. Still, we find it easiest to grasp a concept when we understand not only what something IS, but what something is NOT. So, let's look at what Local Bank Transfers are NOT.
Read on to become a payouts EXPERT.
Local Bank Transfers are not eWallets or Prepaid Cards
Although many say the payouts methods are almost identical, they are mistaken!
Prepaid cards are prefunded payment cards and eWallets are virtual accounts. They are both indirect methods to send payouts because funds are not going directly to your recipients. Also, both methods are associated with hidden or additional fees and can include:
- Withdrawal fees
- Account maintenance fees
- Activation fees
- Closure fees
- Dormant account fees
Fees are subject to change at any time, without notice or approval. So, question is - why would you want to pay additional costs that you can avoid?
Local Bank Transfers are not Bank Wires
Although delivered from bank to bank, bank wires tend to be costly because of the middlemen involved. The more middlemen, the more fees you pay.
When a sender or business sends their bank wire payment to a recipient, it doesn’t exactly go directly there. There are multiple correspondent banks that each charge their own fees throughout the process. This can include:
- Correspondent bank fees
- SWIFT message fees
- FX spreads
- Account fees
- Settlement fees
The list can go on and on- it’s not a pretty sight. **Hint- AVOID MARKUPS CAUSED BY TOO MANY MIDDLEMEN.
Why Local Bank Transfers? The method takes a more direct path, bypassing middlemen to save both time AND money. To learn more, read our first installment of the Ultimate Guide series: Getting to Know Local Bank Transfers: What They Are and How They Can Work For You.