Bank transfers have been at the core of global payments since Western Union added money transfers to its telegram services in 1871, giving individuals the ability to move money across distances via an electronic communication network for the first time. Bank transfers are still one of the most common ways to send money today: They have remained popular due to their trustworthiness, ubiquity, and cost effectiveness. In Europe alone, more than $4T in bank transfers is processed each year. In Mexico, bank transfers have grown 60% in just the past two years.

Despite this growth, bank transfers are still filled with friction—businesses lose hundreds of hours on confirming transfers, reconciliation and accounting, and refunds.  We’ve set out to change that by developing a better bank transfers solution. Earlier this year, we released our solution in Japan, and today, we’re excited to make bank transfers available to businesses in the UK, the EU, and Mexico.

What are bank transfers?

Bank transfers (also referred to as credit or wire transfers) are one of many ways businesses can accept payments from another bank account. What differentiates them from other bank-based payments, such as bank debits like Bacs Direct Debits or redirects like FPX in Malaysia, is that they rely on the customer sending funds to the business.

How Stripe’s bank transfers solution can help

The reliance on the payer makes bank transfers challenging for businesses. Unlike card payments that are initiated by a business for a set amount, bank transfers put the customer in control of the amount and timing. Customers might enter amounts that are incorrect or piecemeal—or, even worse, sent to the wrong business.

Reconciliation is manual, as recipients must find and match orders and invoices to incoming credits in their bank accounts (if those credits reach the right account at all). Businesses can spend hundreds of hours resourcing and accounting for payments, requesting additional transfers and information, and processing refunds from overpayments.

We’ve built a solution that takes away the operational pain of receiving and manually reconciling transfers. We’ve also enhanced the bank transfers experience and made it easy to operate as a payment method (rather than a funding method) in the following ways: 

• Automated reconciliation. We provide a virtual bank account number (VBAN) for each customer, so that incoming transfers automatically map to the correct customer. VBANs are localised and regionally recognisable (e.g., they begin with “DE” for German customers). A reconciliation layer allows businesses to immediately see if a customer has paid too much or too little—and can resolve overpayments through the dashboard and API.
• Simplified refund and return processes. Stripe users can return a payment to a customer without initiating a new bank transfer from their account—a feature not natively built into the bank transfers scheme. With one simple API call or a dashboard click, users can refund a customer—no need to set them up as a payee.
• Integration directly into other processes, like invoices, subscriptions, and revenue recognition. Bank transfers are compatible with our revenue management suite, further removing the operational burden for our users. Users can compliantly request a bank transfers payment with Invoicing and grow recurring revenue with subscription logic provided by Billing. Revenue Recognition streamlines accrual accounting so books can be closed quickly and accurately. 
• Acceptance of other payment methods alongside bank transfers without additional code. Our new bank transfers payment method works with Stripe’s Payment Intents API, which means users can offer bank transfers from the dashboard—no additional integration required. This way, users can have a unified view of all incoming payments (rather than having to go into their bank account just to view bank transfers).

Our beta users have freed up time and resources previously spent on reconciliation and accounting using bank transfers on Stripe. These savings can add up: Spicers of Hythe, a UK-based provider of corporate gift hampers, estimate that they will save their financial operations team more than 300 hours per year, which they can refocus on growing their business. 

We save around 1.5 hours per week of manual reconciliation, solely by not needing to match incoming funds with invoice references. However, the biggest value will come as we scale and don’t need to hire support staff to handle our growing volume of bank transfers.

Bank transfers are now part of Stripe’s bank-based payment solutions

Today’s bank transfers launch adds a key capability for businesses to more easily accept push-based bank payments. In the future, we will expand bank transfers to the US (replacing the current credit transfer beta) and build new account-to-account payment experiences, such as Open Banking payments in the UK.

You can get started with bank transfers in the UK, the EU, Mexico, and Japan today and visit our guide on payment methods for more information on our other bank-based payment methods.