What is a local bank transfer?
You have probably heard the term "local bank transfer". But what does it actually mean? With the increase of business interactions on a global scale, it is imperative to utilize the best payment option to get money from one account to another account. This article will explain what a local bank transfer is, why it matters to businesses, and how you can use it to pay contractors. Local bank transfers typically transfer money faster and have no hidden fees.
How do local bank transfers work?
A local bank transfer is a payment structure that utilizes the local payment system which the payment counter-party accounts are directly connected to. The money is being processed by local banks. For example, if you are an American company paying a contractor in Europe on the Deel platform, the contractor will be paid using a local bank transfer. The funds will be processed by a local European bank, and the funds will be settled through the local payment system which is known as the Single Euro Payments Area ("SEPA"). Local bank transfers do not use the inefficient traditional correspondent banking networks which process international SWIFT transfers.
How to pay contractors using local bank transfers?
Deel works with many local banks and payment processors to create a well-established local bank transfer network, which creates a system at an exceptionally low cost, at speeds that often approach real-time and high security.
When paying out contractors, Deel will suggest the optimal route so contractors can receive their funds quickly and conveniently. Always choose a local bank transfer where possible. For some payments routes, local bank transfers are not available yet, and international SWIFT transfers will be available.