What Is a Bank Giro Transfer?

 man uses a bank giro transfer to pay his bills online

Credit: JGI/Jamie Grill / Getty Images


A bank giro transfer is a type of electronic payment option where you have your bank directly move money from your account to the payee’s account. It’s considered a safer and faster payment method than a personal check. Giro transfers are common in European and Asian countries, but their long history paved the way for the cashless transactions you make. Additionally, giro transfers can be made in U.S. dollars.

Key Takeaways

  • A bank giro transfer offers a way to directly send money from your bank account to someone else’s through a one-time or recurring arrangement.
  • You’ll often use a bank giro transfer to pay bills in your own country or move money between your own accounts at different banks.
  • Requesting a bank giro transfer involves the payer filling out a paper or electronic order form with details about both bank accounts and the transaction terms.
  • Bank giro transfers can offer convenient, secure, and speedy payments, but drawbacks include possible fees and transfer limits plus the requirement that both banks participate in the system.
  • A regular check is a common alternative to bank giro transfers; it can be slower and less secure, but you often don’t face fees or payment limits with checks.

Definition and Examples of a Bank Giro Transfer

A bank giro transfer is a popular check alternative that lets you conveniently and securely move money from your bank account to another party’s bank account. You as the payer have to originate this transfer. These bank-to-bank transfers can be domestic or international. Therefore, giro transfers can offer flexibility both for conducting everyday transactions with companies and individuals in your own country as well as conveniently conducting business overseas.

Alternate name: Giro credit


The U.S. uses the automated clearing house (ACH) system for moving money between bank accounts. It’s used for debit transactions, such as making bill payments, as well as credit transactions, such as receiving direct deposits from your employer.

It’s common to use a bank giro transfer to pay recurring bills automatically every month. For example, you might set up a giro arrangement for your credit card, phone, water, electricity, or telephone bill.

You could also use a bank giro transfer to move funds between your own checking and savings accounts at different participating banks. Businesses might give your customer the option to use a bank giro transfer to pay for your products or services.


The speed and efficiency of giro transfers have led some experts to discuss the possibility of the United States switching to a giro system. Just a few years ago, around 50% of U.S. business-to-business transactions took place by paper check, a system that’s cumbersome and slow compared to giro transfers.

How a Bank Giro Transfer Works

In the countries that use the giro system, requesting a transfer usually involves filling out an electronic form (paper forms are less common). You might fill it out on your bank’s website or mobile app, but other options include visiting a branch, using an ATM, or arranging an order by phone. The form has you specify the source and destination bank accounts. It also requests other important payment terms like the frequency, order type, payment amount, and expiration date for any recurring transfer.

Bank giro transfers occur either through a one-time arrangement (single order) or a recurring arrangement (standing order). Single orders work best for infrequent transactions since you need additional orders to send the third-party money again. Standing orders work well for frequent transactions. They stay in effect until you have the arrangement terminated or it expires. It can take multiple weeks for the initial giro arrangement setup, so you may want to seek other options for urgent payments.


Banks may restrict your ability to use a bank giro transfer to certain types of bank accounts, including trusts, minor accounts, and savings accounts.

While the giro service often operates every day of the week, banks can set specific hours during which the giro transfer option is available. Some banks support these transfers 24 hours a day, while others have daily restricted hours. In addition, there’s usually a cut-off time for payment origination that will affect when the recipient gets the funds. During business days, the recipient can often get the funds the same or next business day but holidays and weekends can delay the process.

On the day the giro deduction is set to occur, the request goes to a giro center that handles the details of the transaction and acts as an intermediary between the source and destination banks. The center will have to check that you have enough funds in your bank account for the transfer and that the account numbers exist before it removes the money from your account and sends it to the destination account.  

If all details check out, the bank giro transfer completes successfully with your bank account debited and the destination account credited. The bank giro transfer will fail if your account doesn’t have sufficient funds or is inaccessible for some reason. In addition, it can fail if the amount is above the payment limit you specified in the original order. Your bank may provide a way for you to track the transfer’s progress to spot issues.


Failed bank giro transfers may not get attempted again automatically. You might need to contact the bank to arrange another payment option or fix the error.

Giro Transfer Process

To see how the giro transfer process works in a real situation, let’s say that you want to set up a bank giro transfer arrangement to automatically pay your telephone bill every month. The following might happen:

  • You log in to your online banking portal and choose the option to create the giro arrangement. 
  • Your bank asks you to select the bank account to use for payments, specify the telephone company to pay, and enter other identifying details like your telephone service account number, maximum payment amount, and name. 
  • You confirm all the details and submit, and your bank begins to process your giro arrangement request. 
  • On your first payment date, the giro center successfully verifies the information, removes the specified amount from your bank account, and deposits it in your phone company’s bank account. 
  • You continue to have your telephone bill automatically paid every month until you cancel the arrangement or it expires.

Pros and Cons of Bank Giro Transfer

  • Convenient for payers and payees

  • Secure payments

  • Fast processing time

  • Limited to participants

  • Transaction limits

  • Possible fees

Pros Explained

  • Convenient for payers and payees: Bank giro transfers have wide acceptance in the countries that use them, and you get a lot of flexibility with the kinds of bill payments and bank account transfers you can make. The ability to set up recurring payment arrangements saves time and makes it less likely to forget a bill payment. Payees benefit when they receive fast and reliable payments.
  • Secure payments: Bank giro transfers have much more security than paper checks that can get lost in the mail or stolen. Since they’re often set up through your online banking app or portal, the information you provide for the payment stays secure. You can also easily track giro transfers on your bank statement to spot potential issues.
  • Fast processing time: As long as you initiate the giro transfer during business hours, the recipient often gets the funds the same day, sometimes in just a few hours. Weekend and holiday payments still usually arrive the next business day. This means this payment option can be much faster than waiting for a check to arrive in the mail for cashing.

Cons Explained

  • Limited to participants: Both the sending and receiving banks will need to participate in the giro system for this payment method to work. In addition, not all  bank accounts are eligible for the service.
  • Transaction limits: If you need to send a payment for a high amount, you may find your bank limits giro transfers either on a daily or per-transfer basis. The limit might depend on how you requested the transfer as well. You may sometimes end up needing to break up larger payments or use a different method altogether. 
  • Possible fees: While some banks don’t charge fees for domestic giro transfers, others charge a small fee that can depend on how you made the request. Banks may also charge fees for international giro payments.  

Bank Giro Transfer vs. Regular Check

Bank Giro Transfer Regular Check
Involves direct funds transfer Involves an intermediary
Order requested by the payer Written out by the payer
More secure Higher risk of loss or theft
Possible transfer fees and limits Usually no fee or limit
Faster payment Slower payment

A regular paper check serves as a common alternative to a giro transfer, and the payer initiates both types of payments. But while a giro payment can sometimes have a transaction fee and payment limit, you usually don’t pay to write out a check and can specify an amount up to your available funds. 


Check processing times depend on the bank’s policies and can vary depending on the check amount, deposit method, and time of deposit. For example, a $200 check deposited during business hours typically clears within one business day, while a $2,000 check may take two business days.

Unlike a giro transfer that involves a direct transfer between accounts, a paper check requires the payee to present and cash the check before getting the funds. Therefore, this payment option can be slower than a giro credit. Not only may the check take a few days in the mail to get to the payee, but it takes additional time for the bank to process and clear. The use of a paper check also presents a higher security risk since the check could get lost or stolen before the payee can cash it.

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  1. Association for Financial Professionals. “Real-Time Payments: Would a Giro System Work in the U.S.?” Accessed Feb. 4, 2022.

  2. MoneySense. “Guide to GIRO.” Accessed Feb, 3, 2022.

  3. Post Office Savings Bank. “FAQs on GIRO.” Accessed Feb, 4, 2022.

  4. Consumer Financial Protection Bureau. “How Quickly Can I Get Money After I Deposit a Check Into my Checking Account? What Is a Deposit Hold?” Accessed Feb, 4, 2022.

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