Rejected Wire Transfers: Common Causes and Solutions

Wire transfers are an essential part of managing both business and personal finances here in Singapore. Whether you’re paying suppliers, sending money overseas, or handling a large transaction, wire transfers offer a quick and secure way to move funds. But when a transfer gets rejected, it can be incredibly frustrating. It can delay your plans, disrupt cash flow, and cause a lot of unnecessary stress. To help you navigate these problems, let’s talk about the common reasons why wire transfers get rejected—and, more importantly, what you can do about it.

What is a Wire Transfer?

Wire transfer, also called electronic funds transfer or wire payments, can help you move money quickly and even more securely than other sources can and without cash exchange. It is an electronic transfer of funds through a network administered by banks and transfer service agencies worldwide, including the Clearing House Interbank Payments System (CHIPS) and the Worldwide Interbank Financial Telecommunication (SWIFT). Wire transfers only need necessary information from the party to carry on the transfer, including the receiver’s name, account number, and the amount of money involved in the transaction.

Today, we are going to have a closer look at why your payments are getting rejected and how to fix it!

How Do Wire Transfers Work? 

In summary, a sender deposits funds at a financial institution and provides the recipient’s name, address, and banking information. The economic institution then reaches the receiver’s bank, freeing funds from their reserves. Later, the money is resolved between the two banks.

This is the crucial difference between wire transfers and other types of money transfers. In a wire transfer, the two financial institutions exchange payment instructions rather than money. Because bank holds do not slow down money, wire transfers are faster than other transfer processes.

Types Of Wire Transfers

There are two types of wire transfers. The first is domestic transfers, which can be made through banks and credit unions, and the second is international. The cost of a wire transfer for both wires varies from one another, as well as the processing times. However, domestic wire transfers are monitored by the office of foreign assets control and get processed within 24 hours, making it an easy and convenient way for customers to send money, while the price varies by transaction, depending on the banking institution.

People or entities use international wire transfers to move large amounts of money in a foreign currency. International wire transfers cost about $45 to send money from the United States to other countries, especially if using a credit card. The recipient’s bank cuts nearly $8 to $10 from the money wired to the recipient. Also, some banks may charge hidden costs above the transaction fee that they charge.

Reasons Why the Bank is Refusing Your Wire Transfer

1. Incorrect Beneficiary Details

One of the most common reasons for a wire transfer rejection is incorrect beneficiary information from the sender’s bank. It could be as simple as a typo in the account number or the wrong SWIFT code. Banks are very particular about details, and even small mistakes can lead to a rejection. When you initiate a transfer, always double-check all the information—like the beneficiary’s full name, the bank account holder’s physical address, bank account number, and any relevant bank identifiers such as SWIFT or IBAN codes.

Solution: Verify the details before confirming the transfer. You could also ask the beneficiary to confirm their details with you to make sure you have everything correct. If you make regular transfers, using templates can help you avoid repeated errors. Another tip is to create a checklist to cross-verify details like the account number, bank name, and SWIFT code to ensure every piece of information matches exactly.

Consider also using automated verification tools and payment services offered by some banks. These tools can pre-validate the beneficiary’s details to prevent errors before you submit a transfer. If possible, initiate a small test transfer before sending a large sum to ensure that the details are correct.

2. Insufficient Funds

Another common reason for a transfer getting rejected is insufficient funds. If your account balance is lower than the amount you’re trying to transfer (including any bank fees), the transaction simply won’t go through. This can be especially frustrating if it happens after the intended payment date, potentially impacting your financial obligations.

Solution: Make sure your account has enough funds before initiating the transfer. Also, remember to factor in any additional fees that might be charged by intermediary banks, which can add to the overall cost. It’s a good idea to keep a buffer amount in your account to cover these unexpected charges.

To prevent insufficient fund issues, it can be useful to set up balance alerts with your bank. These alerts will notify you if your balance falls below a certain threshold, giving you time to top up before making a transfer. Additionally, you could consider linking a secondary account or an overdraft facility to serve as a backup source of funds in case of an unexpected shortfall.

3. Compliance and Regulatory Issues

Singapore has strict regulations in place to prevent money laundering and fraud. If your transfer raises any red flags for compliance, it may get rejected. This often happens if the transfer amount is unusually large or if the details provided are incomplete. Banks might also ask for additional documentation to verify the purpose of the transfer.

Solution: Be ready to provide supporting documents, such as invoices or proof of the source of funds, especially for large transfers. Keeping a clear paper trail can make the compliance process much smoother. If you’re unsure what’s needed, reach out to your bank to understand the requirements.

It’s also a good idea to maintain a record of all financial transactions that might require explanation, including contracts, invoices, and communications with the beneficiary. When planning to make a large transfer, consider notifying your bank in advance. This proactive step can help the bank prepare for the transaction and avoid delays due to compliance checks.

4. Bank-Specific Restrictions

Every bank has its own policies and restrictions. Sometimes, the receiving bank may reject a transfer if it doesn’t meet certain criteria. For instance, some banks may not accept transfers from specific countries, or they might have daily transaction limits.

Solution: Before making an international transfer, take some time to understand both your bank’s and the beneficiary bank’s policies. If you’re handling high-value transactions, it’s worth letting your bank know in advance so they can guide you through the process smoothly.

If your transfer gets rejected due to bank-specific restrictions, consider splitting the payment into smaller installments to fit within the receiving bank’s limits. Additionally, some banks offer special accounts or services tailored for high-value international transfers—these services may have fewer restrictions and offer faster processing.

5. Technical Errors

Sometimes, rejected wire transfers are simply the result of technical issues—a reality in today’s digital banking environment. These could be system glitches, problems with the SWIFT network, or even maintenance downtime.

Solution: If you suspect a technical issue, contact your bank right away. They can help determine if the problem is on their end and, if necessary, try the transfer again. It’s also helpful to avoid making transfers during known system maintenance periods, which banks usually announce ahead of time.

To minimise the risk of technical issues, consider using online banking features that allow you to track the status of your transfer in real time. This way, you can quickly identify any delays or rejections. In case of recurring technical issues, it might be worth exploring alternative methods or even changing to a bank with a more reliable transfer system.

What Information is Needed for a Wire Transfer?

For a wire transfer, the following details are generally required:

• Sender’s Information: Full name and phone number.
• Recipient’s Information: Full name, phone number, address, bank name and address, bank account number, and account type (e.g., savings, current).
• For International Transfers: The recipient’s BIC/SWIFT code and/or International Bank Account Number (IBAN). The BIC is a standardised identifier for banks and financial institutions, while the IBAN, an alphanumeric code up to 34 characters long, specifies individual bank accounts for international transactions.

Additionally, the sender’s financial institution may request further information, including:

• Government-issued ID (e.g., passport or driver’s license)
• Email address
• Proof of address (such as a recent utility bill or bank statement)
• Proof of ownership of the bank account from which the transfer will be made
• Purpose of the transfer

What Affects Wire Transfer Speed?

To ensure a wire transfer is completed as quickly as possible, both the sender and recipient should consider these key factors:

• Holidays and Weekends: Bank holidays, national holidays, and weekends often delay transfers, as most financial institutions are closed during these times.
• Cut-Off Times: Financial institutions typically set a daily cut-off time, after which transfer requests are processed the next business day. Cut-off times vary by institution, and some banks may have different cut-off times for specific countries. To ensure same-day processing, the sender should check and meet the cut-off time requirements.
• Errors: Accuracy is essential. Incorrect information—such as a misspelt name or an incorrect SWIFT code—can cause delays or result in the transfer being rejected. Both the sender and recipient should double-check all details to prevent hold-ups.
• Destination Country: Transfer speed varies widely between countries. Some international transfers may take several days or even weeks due to slower processing systems, currency exchange issues, time zones, or local banking regulations, such as limits on transfer amounts. Transfers to distant locations may also pass through intermediary banks, adding to the processing time.
• Additional Factors: Wire transfer speed can also be affected by factors like fund availability, system outages, the recipient institution’s processing rules, and the transfer method. Direct bank-to-bank transfers are generally faster than other methods.

Security of Wire Transfers 

Wire transfers are generally safe in Singapore. The Monetary Authority of Singapore (MAS) regulates the banking industry in Singapore and has put in place a number of safeguards to protect consumers. These safeguards include:

• The Payment Services Act (PSA): The PSA regulates payment services in Singapore, including wire transfers. The PSA requires payment service providers to have adequate safeguards in place to protect consumers’ money.
• The Anti-Money Laundering and Counter-Terrorist Financing Act (AMLA): The AMLA requires financial institutions to take steps to prevent money laundering and terrorist financing. This includes verifying the identity of customers and scrutinising wire transfers for suspicious activity.
• The Code of Conduct for the Provision of Payment Services (CCPSS): The CCPSS sets out the standards that payment service providers must adhere to when providing payment services to consumers. The CCPSS includes provisions on customer protection, fraud prevention, and dispute resolution.

In addition to these laws, banks in Singapore also have their own internal policies and procedures in place to protect consumers. These policies and procedures typically include things like:

• Requiring customers to provide identification when sending or receiving wire transfers
• Verifying the recipient information for wire transfers
• Monitoring wire transfers for suspicious activity
• Ensuring that wire transfers are processed in a timely manner

By following these laws and regulations, banks in Singapore help to ensure that wire transfers are safe and secure.

What To Do If Your Transfer Is Rejected?

If your wire transfer gets rejected, don’t panic. Here are some steps you can take:

1. Contact Your Bank: Get in touch with your bank to understand why the transfer was rejected. They can provide insights and guide you on how to resolve the issue. Ask specific questions like whether there were any errors in the information, issues related to compliance, or insufficient funds. Knowing the exact reason can help you fix the problem more efficiently.
2. Double-Check Information: Go over all the details to make sure everything is accurate and complete. Pay attention to small details like spelling errors, missing digits, or incorrect SWIFT codes. Correct any errors and try initiating the transfer again. It might also be a good idea to ask the beneficiary to re-confirm their account details.
3. Ask for Guidance: If you’re dealing with complex or large transfers, asking for guidance from your bank beforehand can save you a lot of headaches later on. Most banks in Singapore have dedicated relationship managers or customer service teams that can provide assistance for high-value or cross-border transfers. Don’t hesitate to ask questions about transfer limits, expected timelines, and any documentation that might be required.
4. Check For Timing Issues: Sometimes, transfers get rejected because they were initiated during a time when the receiving bank was undergoing maintenance or had limited operating hours. Check with your bank regarding the best time to initiate a transfer, especially if you’re sending money overseas. Timing the transfer correctly can help avoid unnecessary delays.
5. Document Everything: Keeping a record of all the communication with your bank, as well as any emails, receipts, and screenshots of transfer attempts, can be extremely helpful if you need to escalate the issue. If the rejection repeats, having detailed records can also make it easier for your bank to troubleshoot and solve the problem.
6. Consider Using a Different Method: If a particular wire transfer keeps getting rejected, it might be worth considering alternative methods for transferring money. Our Grof app offers smoother ways to send funds, particularly for international payments.

Alternative Solution to Wire Transfers

We provide an excellent alternative if you’re looking to reduce costs and simplify international transfers. With Grof, you can save up to 70% on fees compared to conventional banks, allowing you to send funds globally without the hefty charges that often accompany bank transfers. Grof’s extensive network supports transfers to over 190 countries, ensuring that your money reaches its destination quickly and securely, no matter where you’re sending it. Additionally, Grof provides access to the lowest FX (foreign exchange) rates, maximising the value of your transfer and minimising currency conversion losses. By choosing Grof, you benefit from a streamlined, affordable, and reliable solution for international money transfers.

Tips to Stay Safe on Sending or Receiving Payment Transfers

When it comes to sending or receiving payment transfers, taking extra precautions can save you from unnecessary headaches, fraud, or delays. Here are some key tips to ensure your transactions are safe and secure:

1. Verify Beneficiary Details Carefully: Always double-check the beneficiary’s information before sending a transfer. Incorrect details could result in rejected transactions or even funds going to the wrong account. Consider contacting the beneficiary directly to confirm their banking information.
2. Be Aware of Scams and Phishing Attacks: Fraudsters often use email or SMS to trick people into sharing banking details. Be wary of unsolicited communications and avoid clicking on suspicious links. If you receive an unexpected message requesting a payment, verify its authenticity directly with the sender.
3. Use Secure Networks: When initiating a transfer online, always use a secure and private internet connection. Avoid using public Wi-Fi, as it can expose your sensitive financial information to hackers. Make sure that your computer or mobile device is protected with strong antivirus software.
4. Activate Two-Factor Authentication (2FA): Many banks offer two-factor authentication for added security. Activating 2FA helps ensure that only you can authorise transactions, making it harder for unauthorised individuals to access your accounts.
5. Monitor Your Bank Account Regularly: Keep an eye on your bank account for any unusual or unauthorised transactions. The quicker you spot an issue, the faster you can take action to resolve it. Set up notifications for transactions to get real-time alerts.
6. Maintain Detailed Records: Always keep records of your transfer details, including transaction numbers, beneficiary information, and any email or communication related to the payment. These records can be crucial if any issues arise or if you need to escalate a problem.
7. Limit Personal Information Sharing: Only share essential information for the transaction, and ensure that you are communicating with trusted parties. Sharing too much personal or financial information increases the risk of identity theft.

By following these tips, you can help protect your business from fraud and other problems associated with wire transfers.

Experience The Future of Finance with Grof Business Account  

Wire transfers are a reliable way to manage your finances, but rejections can happen if you don’t take proper care. By understanding the most common reasons for rejections—like incorrect details, insufficient funds, compliance requirements, bank-specific restrictions, and technical errors—you can greatly reduce the risk of delays. Remember, double-checking your information and maintaining clear communication with your bank are key to making sure your transfers go through smoothly.

That’s why exploring options like Grof makes sense. Our business account ensures money moves using the actual mid-market rate, leaving no room for hidden charges through inflated exchange rates. It’s a rapid, effortless, and secure solution that often outperforms traditional bank transfers in terms of cost-effectiveness.

Furthermore, backed by robust payment approval security and two-factor authentication (2FA), we ensure your funds remain under your vigilant watch, preventing any unauthorised movement. Seize the opportunity today – sign up for free!