International Payments: How You Can Lose Thousands Without Even Realizing It

Sending money abroad through your bank might seem like a straightforward task, but it can end up costing you a lot more than expected. Hidden fees, unfavorable currency conversions, or even minor data entry mistakes can lead to significant losses. In this article, we’ll break down why knowing just the recipient’s account number isn’t enough, and how to avoid the most common traps of international transfers.

The Hidden Journey of Your Money: Around the World and Back

At first glance, making an international payment looks simple. You log into your online banking, enter the recipient’s account number (or IBAN), select the currency, state the purpose of the transfer – and done. Ideally, the money arrives quickly and in full.

But reality is often more complicated – especially if you’re sending a currency other than euros within the EU or EEA. While SEPA payments offer a relatively seamless experience for euro transfers, anything outside that comes with a web of hidden steps, fees, and risks that can catch even experienced users off guard.

What Really Happens During an International Payment

Let’s say you send $1,000 from a Czech bank account held in CZK to a Hungarian account in forints (HUF). What actually happens?

• The money will be converted twice – first from CZK to USD.
  
• Then again from USD to HUF – often with an additional step through EUR.
  
• You, the sender, will pay a fee based on the selected fee distribution type (SHA, OUR, or BEN).
  
• The transaction will pass through the U.S. clearing system, which adds another fee.
  
• Correspondent banks – those that route the payment along the way – often charge their own fees, sometimes amounting to several hundred CZK. The more banks involved, the more fees you’ll pay.
  
• The recipient will end up with significantly less than the $1,000 you intended to send. After all the conversions and intermediary fees, the final amount can be much lower.
  
• If you select the OUR payment type (where the sender covers all fees), those extra charges will come back to you.
  

Even then, there’s no guarantee the recipient won’t be charged something on their end.

Of course, this is not how most people want to send money, but it’s exactly what can happen if you don’t pay attention to the details when setting up an international transfer.

Hidden Costs Along the Way: When Every Bank Takes a Cut

The main issue lies in the correspondent banking system: each bank or financial institution involved in the transaction chain can “slice off” a portion of the commission. In some cases, a payment might pass through three or even four different institutions, each charging its own fee. The end result? The recipient often receives far less than what you originally sent – even if you selected a payment method where all fees were supposed to be covered by the sender.

And it gets worse. If there’s even a minor error – like a wrong account name when sending money to China – it can take weeks to get the payment refunded, often with additional charges. Investigations, cancellations, and reversals can cost thousands of crowns. This is a common trick used by some foreign banks to capitalize on small mistakes. And once it happens, there’s usually little you can do.

Here’s one real-world example: a retiree regularly received New Zealand dollars into their Czech account. Each time, the bank automatically converted the payment into Czech crowns, deducting over 10% in the process. There was no way to opt out of the conversion: the bank refused to change the settings, calling it “uneconomical,” and rejected the complaint. The funds had already been altered by correspondent banks along the route.

When Speed Becomes the Enemy of Security

Let’s talk about fraud, because it’s not just about fees and conversion rates. Fake account numbers, phishing scams, and forged invoices can cost businesses and individuals tens of thousands of crowns. And if the error isn’t caught immediately, the money is usually gone for good. Fraudsters often use a web of accounts to move the funds quickly – sometimes outside the EU – making complaints and recovery nearly pointless, warns Jan Karger, board member at Citfin.

Yes, you can file a complaint about a suspicious transaction. But you’re working against the clock: think minutes or hours at most. The standard complaint process, on the other hand, can take weeks or even months. By the time your bank contacts the recipient bank through official channels, the funds are often long gone.

Here’s how one typical scam works: a fraudster sends a forged invoice by email. The recipient (often an accountant or other employee authorized to make payments) doesn’t double-check the details. The money is transferred to the fraudster’s account and vanishes within minutes. Technically, this is considered unjust enrichment under the law, but recovering the money is nearly impossible without the recipient’s cooperation or immediate police action.

Even if the money goes to a real, existing account abroad by mistake, getting it back depends entirely on the goodwill of the recipient. Legally, you’re in the right, but in practice, enforcement is next to impossible.

A real-world example? A Czech company accidentally transferred the equivalent of several tens of millions of crowns to another business account in Asia. The recipient company didn’t return the funds. Instead, it found it more convenient and profitable to shut down the company entirely.

Verification of Payees Is on the Horizon

A major step toward fighting payment fraud is on its way in the form of a new European regulation known as Verification of Payee (VoP). This system will automatically check whether the account holder’s name matches the account number entered for a payment. It’s a move in the right direction, but according to Jan Karger, we’ll have to wait a few more years before it’s implemented in the Czech Republic.

Here’s how it will work: before you confirm a payment, your bank will show you the actual name of the account holder. If there’s a mismatch, the system will notify you, although the bank or payment provider can still proceed with the transfer if you approve it.

This upcoming innovation is a welcome safeguard for those sending money. However, it’s also an expensive upgrade for banks and payment institutions, no matter where they operate in the EU. That’s one reason why the rollout is taking time.

How to Enter an International Payment Correctly

• Always verify the currency of the target account and send the same currency.
  
• Ask the recipient which fee structure they prefer (SHA, OUR, BEN).
  
• For larger amounts, consult about the payment in advance — either with bank specialists (note: you won’t find them at the branch) or with foreign exchange experts.
  
• Calculate the total cost beforehand — not just your bank’s fee, but also the expected exchange rate losses and potential correspondent bank deductions.
  

Revolut, Wise, and Other Non-Bank Providers

For personal use, services like Revolut, Wise, and Zen are excellent — fast, efficient, and generally reliable. But the moment something goes wrong, their limitations become clear. These platforms are fully automated, including their transaction processes. Human support only comes into play once you file a complaint — and even then, you first have to get through bots and scripted responses. The complaint process can drag on for weeks or even months.

What might be a minor inconvenience for an individual can be a serious risk for a business — whether you’re a sole trader or an LLC relying on timely transfers.

So what’s the takeaway? Small sums (a few thousand euros) can be safely sent via fintech platforms. But for larger transactions — buying or selling property abroad, transferring an inheritance, paying for a vehicle — stick with a bank or, even better, consult professionals who specialize in cross-border payments and currency operations.

Why a Payment Can Fail — Even If You Did Everything Right

• Entered the wrong account number? The payment might bounce back – but with a fee deducted.
• Typed in the correct number, but the wrong name of the account holder? In some countries (like China), the payment may be delayed, and fixing the error could cost you up to CZK 2,000.
• Does the recipient’s account exist but in a different currency? The bank may process an automatic conversion – leading to additional losses. Or the payment could be rejected and returned, again with a fee.

Need help with international transfers, foreign exchange strategy, or choosing the right payment structure?

360WEDO offers tailored consulting services to help your business avoid costly mistakes and transfer money securely and efficiently. Reach out to us – and let your payments travel smart.Source:
https://www.mesec.cz/clanky/zahranicni-platby-pod-lupou-muzete-prijit-o-tisice-aniz-byste-udelali-chybu/