Our comprehensive guide provides you with all the necessary information about the payments landscape in Luxembourg.
Introduction to payments in Luxembourg
Luxembourg might be one of the smallest nations in Europe, but it boasts remarkable financial success, with businesses and organisations from all over the globe benefiting from its robust financial services and wide access to European and worldwide markets. The country is home to fintech innovation and is renowned for having a favourable tax environment (sometimes as little as less than 1%), attracting international corporations. In this payment guide, we’ll explain how to send money from the United Kingdom to Luxembourg
, plus how 3S Money's International Business Account
can help streamline the process.
What payment networks are supported in Luxembourg?
First things first, let’s explore what payment networks are available in Luxembourg. For context, a payment network is an association of banks that facilitate and authorise payments between merchants and issuers. Luxembourg supports a variety of payment networks, all of which ensure safe and secure payments. These are:
While these networks function similarly, they also have their own distinct characteristics. Let's take a deep dive into these four networks.
is an acronym for ‘Single Euro Payments Area’, which allows money to be moved freely across the European continent. The network is relied upon by thousands of European organisations in the European Union (EU) who make use of its straightforward process, fast payment times and second-to-none security. In Luxembourg and beyond, credit transfers, direct debits and payment cards can be used with SEPA, with payments processed instantly.
Despite the UK no longer being a member of the EU, it remains a member of SEPA. This means that transferring money to and from Luxembourg is as simple as transferring money domestically. In a nutshell, SEPA is a secure and straightforward way to transfer money to Luxembourg.
The ‘Society for Worldwide Interbank Financial Telecommunications’
, or SWIFT, is another widely used payment network across the European continent (and the wider world). SWIFT is technically a messaging network that allows financial organisations to communicate with one another via their unique ID codes. This code, known as a SWIFT code
, is used to pinpoint specific details about members during the transferring process.
A huge benefit of using SWIFT payments for business transactions is that you can send and receive money internationally, even if the recipient’s bank is completely different to your own. Its worth noting that unlike SEPA, transfers that use the SWIFT network are slightly slower and may take up to four working days to process.
If you’re thinking about sending money from Luxembourg to the United Kingdom or vice versa, SWIFT could be the choice for you.
The Trans-European Automated Real-time Gross Settlement Express Transfer System (TARGET2 for short) is a payment system used specifically in the Eurozone. Despite the complex name, the network provides a simple and efficient service that helps ensure the settlement of cross-border transactions involving the Euro. The main function of TARGET2 is to bolster the smooth running of the euro area’s financial system.
TARGET2 is a real-time gross settlement (RTGS) system, which means that transactions are settled individually and immediately without any netting. The network is woven into the overall payment and settlement infrastructure in the Eurozone. For Euro to Euro payments, it can be invaluable.
With a much more domestic focus than the other payment networks in this list, LuxCSD exists to provide Luxembourg’s money market and financial community with settlement services in EUR central bank money. The network is technically a central securities depository (CSD for short) and allows custodian banks and European distributors a highly efficient settlement process. This method acts to lower risk for financial market participants.
What payment methods are available for sending money to Luxembourg?
Now that we’ve covered the payment networks available in Luxembourg let’s dive into the payment methods that are available.
If you need to make a business payment, then bank transfers are one of the simplest ways to send money over to Luxembourg. Although this is a popular and convenient method, it can also be expensive, especially for enterprise-level businesses. Banks can charge a processing fee for international business payments to Luxembourg – and that’s without mentioning the percentage charge on the total amount you’re sending or extra FX costs. These rates will vary from bank to bank, so always make sure to do your research.
, founded in Luxembourg, is a mobile payment processing platform that allows users to make payments from their smartphones. Its goal is to make payments smooth and simple by connecting user’s cards or bank accounts to the app.
ePayments (PayPal, V PAY, Bancontact)
ePayments are the best route to take if you’re considering sending business payments from the United Kingdom to Luxembourg without credit or debit card details. Platforms such as PayPal, V PAY and Bancontact allow users to make free transfers to Luxembourg.
Although ePayments are a simple solution for various one-off payments, it’s worth noting that they don’t have the high level of security that is expected with other methods. With a 3S Money International Business Account, however, your payments are safe and secure as 3S Money is FCA
regulated. Get started with an account today.
Key factors to consider when sending money to Luxembourg
While sending money to Luxembourg is straightforward, there are still various important factors to consider before choosing your payment method and provider.
Exchange rate fluctuations
Just like with any other international business payment, exchange rate fluctuations should always be a consideration when sending money to Luxembourg. If you have a 3S Money Business Account, you can take advantage of bank-beating rates thanks to our own dedicated FX desk.
If you’re making regular payments throughout the year to or from Luxembourg, transfer fees can quickly add up, especially when using traditional banks. However, 3S Money account holders can navigate this problem with ease, as 3S Money charges a flat fee of $1 (or your local equivalent) per SWIFT transfer, regardless of the total amount.
In the fast-paced world of international business, transfer speeds are of the utmost importance when making payments. Unfortunately, many transfer methods can have long transfer times – some up to five working days. Thankfully, 3S Money offers same-day payments.
How to send money to Luxembourg with 3S Money
Sending money to Luxembourg doesn’t have to be complicated. 3S Money’s International Business Bank Account is specifically designed to save time, cut costs and reduce bureaucracy when making worldwide payments. Unlike traditional banks, 3S Money cuts the complexities of international payments without sacrificing security. Here are the steps for sending money to Luxembourg with 3S Money:
- Open a 3S Money International Business Account
The application process couldn’t be simpler. All you have to do is check your eligibility to start the application process and we’ll be in touch.
- Enter the recipient’s transfer details
Once approved, simply enter the name and account details of the recipient and pick the correct currency and country. For reference, Luxembourg’s currency is the Euro.
- Hit send
Once you’re confident the details are correct, you can hit send and wait for the notification that confirms your payment was processed successfully. In most cases, this takes roughly two hours.
It’s as simple as that.
If you’re wondering how to send money from Luxembourg to the United Kingdom, 3S Money’s business account is your answer. Here are some of the benefits:
● You'll receive a dedicated client manager who takes a consultative approach
to your business banking.needs
● You'll access to 65+ currencies (including the Euro currency in Luxembourg).
● Global reach, with access to over 190 countries.
● No translation limits.
● Ultra-competitive FX rates.
● Local IBAN details.
Send money to Luxembourg securely and efficiently with 3S Money
We’re proud to be changing the way businesses send and receive payments, for the better. Whether you’re transacting in Luxembourg or the UK, we’re here to help. With a 3S Money business account, payments couldn’t be simpler.