Euro account and payments: efficiently and swiftly transfer funds to European countries

Kirstie Lau3 minutes
FinanceGuides
Euro account and payments: efficiently and swiftly transfer funds to European countries
In this article

With the accelerated globalisation, many companies are expanding their operations to tap into the global market. Among these, Europe emerges as a prominent player that offers vast opportunities for growth. However, venturing into overseas markets entails dealing with foreign currency exchange and transactions.  The article will explore cost-effective and efficient options for remittances in the volatile foreign exchange market, ultimately reducing operational expenses for businesses.

Liquidity of Euros

As the second most widely circulated currency on the international market (after the US dollars), the Euro holds a prominent position in global trade, finance, and currency markets. Not only is it the common currency in the majority of European Union (EU) countries, the Euro is also accepted in certain non-Eurozone countries and widely used for pricing. Moreover, the Euro is highly liquid in the foreign exchange market due to its linkage with multiple currencies. When expanding into overseas markets, businesses can effectively save on foreign exchange costs by utilising the Euro directly for service fees or transaction settlements.

The guide to sending money to European countries: common ways of Euro transmittances

1. Wire transfers

In Hong Kong, there are several ways to conduct cross-border remittances, with one prevalent approach being wire transfers. Wire transfer serves as a means for banks to transfer funds overseas, involving three parties: the remitting bank, intermediary bank, and receiving bank. These transfers are facilitated through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, which connects banks worldwide for remittances. 

Before initiating a wire transfer, you will need to provide the recipient's name, complete address, the SWIFT code of the receiving bank, the recipient's IBAN code (used by European banks to process remittances), and other necessary banking details. In some cases, it may also be required to specify the purpose of the transfer. Traditional wire transfers typically involve multiple banks, hence the relatively high transaction fees.

2. Single Euro Payments Area (SEPA)

What is SEPA?

The Single Euro Payments Area (SEPA) is a collaborative payment initiative implemented by more than thirty countries in the EU, allowing users to transfer funds seamlessly between European bank accounts. It aims to make  cross-border remittances as convenient and secure as domestic payments.  

SEPA simplifies non-cash transfers denominated in euros, streamlining the process and improving the efficiency of cross-border payments. There are three types of SEPA: SEPA Direct Debit (SDD) Transfer , SEPA Credit Transfer (SCT), and SEPA Instant Credit Transfer (SCT Inst). In general, SEPA transfers are faster and more cost-effective compared to traditional remittances.

SEPA’s regulations regarding bank account formats

SEPA transactions must be made in euros and should always include the International Bank Account Number (IBAN) of both parties. The Bank Identifier Code (BIC), also known as SWIFT code, is no longer mandatory so the process is much simpler.

Things to consider when making Euro payments and transfers to European countries

  • Regulations and other relevant processes: The European Central Bank is responsible for overseeing the exchange rate mechanism within the EU and coordinating monetary policies among member countries. Overall, EU countries generally refrain from implementing foreign exchange controls, as they encourage free trade and investment. As a result, companies are only required to comply with the regulations of their own country and the destination country for any transfers.

  • Recipient Information: When initiating euro transfers via the SWIFT system, it is necessary to furnish the name and address of the account holder, the recipient's bank details, which includes the SWIFT code and the IBAN, along with any other relevant information. 

  • Usual duration for a wire transfer: Generally, SWIFT transfers take between 2-5 business days, while SEPA transfers typically take 1-2 business days.

  • Canceling a transfer and requesting a refund: The cancellation and refund policy may vary depending on the remittance institution or platform you have chosen, whether you are using the SWIFT or SEPA system. It is crucial to note that requesting a refund could result in additional fees, and such requests typically need to be made within a specified time frame.

  • Transfer limits for sending money to European countries: For traditional banks, you have the flexibility to register and set your own transfer limits for frequently used recipients. However, when it comes to SEPA, the transfer limits can vary depending on the specific type of transfer. For example, the transfer limit of SDD is determined by the agreement between the payer and the payee.

What are the general requirements for opening a Euro account?

The demand for opening Euro accounts is steadily increasing among businesses engaged in international trade. In addition to local bank foreign currency accounts, businesses may also want to focus on key business transactions in European countries. However, the process of opening a local bank account can be complex. 

Besides a local address and contact information, various identification documents and business registration files are required. In many cases, even the company's representative needs to handle matters on-site, adding to the challenges of the process. Occasionally, despite having all the required documents, the process of opening an account can still be lengthy due to rigorous verification procedures. Moreover, some banks may impose monthly fees and set minimum deposit requirements, rendering it less favourable for businesses to open an account directly with European banks.

Advantages of open a global Euro account with Airwallex

Airwallex offers businesses a revolutionary solution with its Global Account. Simply submit an online application, and you can open an account within minutes it is convenient, fast, and completely free of charge. 

In addition to euros, we also support various foreign currency transactions. Airwallex's leading market exchange rates allow you to easily exchange currencies, always accessing the ideal exchange rate.

With Airwallex, businesses can make payments directly in euros from their account, and receive foreign currencies directly into their Global Account without the need for additional currency conversion. This simplifies operations and helps save on exchange costs, effortlessly enabling businesses to expand into international markets.

Open a global multi-currency account for free in Hong Kong

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Kirstie Lau
Senior Associate, Growth Marketing

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