If you want to send your kid some money in a foreign country you can go to your bank and they will make a very wonderful show of filling in forms and they do mysterious ceremonious dances to show how difficult this transaction is and how many steps in their hierarchies are to be taken to get your money all the way to a bank in Farawayistan, and for a sizable service fee from you for sure.
This is nonsense, since the banks have had in operation a bank-to-bank money transfer network called SWIFT for decades, and all they have to do is enter the numbers you provided and it is transferend within milliseconds to the receiving account in the foreign bank. Yes to the customers at both ends they pretend that it takes days because they want to get interest on your money while it is kept in transit, to earn money for the banks costs. That is not going to change whether we want it or not.
What is going to change is that by internet banking we can type in the info for the transfer ourselves, which is then forwarded by bankcomputers to SWIFT, so that the ceremony in the bank office and the extra costs for that, will be lifted.
In fact the difference between domestic and foreign banktransfers by online internet banking is lifted, from your laptop/smartphone/tablet. It does not matter where the recipient resides and what bank he/she uses there, as long as you know the banknumber and accountnumber. This user facility has been available and in use for quite some time now. Well, some less civilised (or should we say more self-centred) countries like China and the USA have not introduced this facility yet. The result is less cost and faster online money transfer. Which is good for trade transactions and society links across borders.
How does it work? Instead of entering a bank account number for the recipient you have to enter the IBAN (International Bank Account Number) for that persons/company’s account, which includes the account number in a certain way. The construction format of the IBAN for the respective countries is shown in http://en.wikipedia.org/wiki/International_Bank_Account_Number
If all is well the IBAN for your own account is printed on every bank statement you get from your bank. So the recipient should be able to tell it to you. Funny enough some banks refuse to tell the IBAN of a client to you “to protect their privacy”. Rubbish, who does not want to receive money? And if you or your company sends bills, print the IBAN on the bill next to the bankaccount number, this saves clients from having to make phone calls to get it. In reality the bank offices do not like to be dis-intermediated by Internet. Well behaving like an obstacle on the information highway will not lengthen their viability. They better start giving real services to customers, right?
Well as usual the USA government, and probably several other countries, want to see what happens in transnational SWIFT traffic to trace money flows etc, so assume your privacy is zero already.
If you want to test this DIY function, send me an email and I will reply with my IBAN, so you can send me a small amount, which I will keep 🙂 and I will mail you back when it arrived on my account [ van till at gmail dot com]
The change I describe here is about Electronic Funds transfer from Bank-Bank to Account-Account. End-to-End like it should, without having to ask anybodies permission.
PS The RaboBank in the Netherlands now gives online instructions how to do money transfer cross border with internet banking (in Dutch) “Met een Wereldbetaling maak je snel en eenvoudig geld over naar ieder land in de wereld: http://rabo.nl/pqf7e “. They DO charge something though, while you can choose if you / shared/ recipient pays the charge. For the intermediary computer processing, right?!
Jaap van Till, connectivist