How to get your money to Spain

This article by Andrew Bibby, in a slightly different form, was first published in The Observer, 2006

It takes a few short hours for Richard Peters to travel from Yorkshire to the holiday cottage in southern Spain that he co-owns with two friends. It takes many days and sometimes weeks, however, for him to transfer money into his bank account in Spain.

The process, he says, seems resolutely stuck in the past: he sends cheques through the post to the London office of his Spanish bank, and waits while these are forwarded to Spain.

It should, he feels, be easier than this: 'I'd like simply to be able to transfer money into the Spanish account over the internet, as and when it needs topping up. Whichever bank offers this service first will clean up. I'm surprised somebody like Stelios hasn't done an "EasyBank" on these lines yet.' What particularly frustrates Richard is that his UK account is with Abbey and that his account in Spain is with Santander, since 2004 the owner of Abbey.

Abbey's response is that the computer systems are incompatible. But the increasing growth of global groups such as Santander is throwing the rickety nature of many cross-border money transmission schemes into sharp relief.

Spain is the most popular destination for British people wanting to buy second homes, and Spanish banks are increasingly geared up to newcomers' needs for local bank accounts, which provide the easiest way to pay utility bills and local taxes. But, as Richard has discovered, keeping a Spanish account topped up is not always straightforward.

The problem is conservatism, not technology. Visa has a money transfer service operating in Greece, Switzerland and some other areas of Europe which allows card holders, through their banks, to transfer money easily to overseas bank accounts or to other Visa card accounts. Visa says, however, that no British banks have yet agreed to sign up to the facility.

The reform of UK clearing arrangements for electronic bank transfers seems unlikely to help. Apacs, the association of banks that runs the clearing system, has belatedly promised a speedier network by the end of 2007 for internet and telephone bank transactions within the UK, which, astonishingly, still take three days to process. Apacs's Sandra Quinn says extending this service to international electronic payments is unlikely in the foreseeable future.

Reforms are moving more quickly in continental Europe, where the high cost of cross-border transfers in the eurozone has led the EU to push banks to develop a 'Single European Payment Area' (Sepa) by 2010 and to the introduction of international bank account numbers (Ibans).

Most UK banks are members of the inter-bank global network Swift, which offers a relatively quick, though expensive, route for transfers (charges are usually levied at both ends of the transfer process). Other, smaller, networks can offer better value. The Co-operative Bank, for example, is a member of Tipanet ('Tipa' meaning 'Transferts Interbancaires de Paiements Automatisés'), and for a flat fee of £8 can route payments to several countries, including Spain . Alliance and Leicester , through its ownership of the former Post Office Girobank, offers customers transfers through Eurogiro for £7.50. Neither Tipanet or Girobank transfers incur extra fees at the receiving end.

But British people with homes and bank accounts in Spain should also talk to their Spanish banks. Many major banks there participate in an arrangement, originally designed for Spanish migrant workers in Britain , that offers perhaps the easiest way of crediting Spanish bank accounts. You simply pay money in at a UK post office, using TransCash paying-in slips. There are normally no post office charges to meet, and transfers are at inter-bank exchange rates rather than tourist rates.

Alliance and Leicester, which runs the UK end of this service, appears less than happy at the thought of thousands of Britons with holiday homes in Spain discovering a facility that it chooses not to publicise. 'We would not want people being given the impression that the Migrant Workers Scheme is a panacea... the MWS does not have the same guaranteed timeframes as either the Swift transfer or Eurogiro,' says a spokesman. Nevertheless, those Brits already using it appear to find that transfers take place efficiently - and at very low cost.

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