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Created on 07.11.2022

International payments – how they work, what they cost

Many Swiss companies have a global presence, and have many different business relationships. But how exactly do international payments work?

“Swiss made”: there’s strong demand abroad for goods and services from Switzerland. In turn, a lot of good and services are imported from other countries. This means there are considerable sums of money in various currencies going back and forth around the world. Find out here how international payment transactions work exactly, and what to bear in mind.

How international payment transactions work

In banking, an international transaction is made using payment transaction systems that include:

  • SWIFT: a globally active society that executes payments in all currencies, and is the most commonly used standard
  • TARGET2: operated by the Eurosystem, with payments made exclusively in EUR
  • SEPA: this allows cashless payments to be made in the single European financial area in EUR

You don’t need to worry about anything when it comes to making international payments. Your bank will take care of it, and will apply the current exchange rates for your Swiss francs. You can transfer money to an account abroad easily with Giro international. Cash international, a Switzerland-only service provided by PostFinance, allows you to make cash payments abroad. However, this service is increasingly falling out of use.

An overview of international payment fees

There are two fees types for an international transaction from your account:

  • At the expense of the customer (OUR): the customer assumes all fees in the form of a flat fee. The full amount is paid to the payment recipient’s financial institution. PostFinance charges 22 francs for OUR.
  • Fee splitting (SHA): with SHA, there are fees that the banks involved can charge. These fees are deducted straight from the transaction amount, the consequence being that the recipient does not receive the full transaction amount.

Important: credit fees, i.e. deductions by the recipient bank, may be due for both fee types.

In e-banking, PostFinance charges a basic fee of 2 francs outside the SEPA area, and 12 francs for express transfers. A transfer with a written payment or standing order from your account will cost 5 francs with PostFinance, and 15 francs in express cases. Electronic standing orders, on the other hand, are free of charge.

How can I send euros free of charge, in other words without any additional fees?

You can do this with the European system SEPA (short for Single Euro Payments Area). Main advantage: PostFinance offers this payment method free of charge. There is no transaction fee. Credit fees may apply though.

How long does an international payment take?

Transactions in a foreign currency generally take one to two days from direct debit.

  • With SEPA, the transaction time is no more than one banking day from the debit date.
  • With Cash international, you can transfer cash abroad easily and securely. The recipient receives a payment document by post that can be redeemed for cash at the local Swiss Post branch or bank. Issuing/delivery takes five to eight working days.

These details are required for international payments

  • Account number or international bank account number (IBAN)
  • Payment recipient’s name and surname, and, in some instances, address
  • Bank code (BIC/SWIFT code) of the recipient’s financial institution or their bank ID (local clearing number) – this is not required with SEPA transactions

What changes can we expect to see in international payment transactions?

Instant payments are on the increase all over the world. With this payment type, the payment recipient receives the money from the debtor in a matter of seconds.

Nowadays, 61 percent of European SEPA-ready payment service providers (PSP) already offer SEPA instant transfers, with this number set to rise. The payment volume, too, is increasing significantly on a year-by-year basis.

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