Is the use of a banker´s draft mandatory?

How to use a banker’s draft in Spain

13 / Sep

Since January 1st, 2021, the banker´s draft is no longer a valid method of payment in certain countries, like the Netherlands, because this method of payment is generally more expensive than a bank transfer and is also much more susceptible to fraud. Yet in Spain, a banker´s draft is often still used, especially when buying or selling real estate. Does this mean that as a buyer or seller you are obliged to go along with this practice and accept a banker´s draft? Absolutely not.

The banker´s draft

The use of a banker´s draft is included in Spain in the 1985 “Ley Cambiaria y del Cheque”, a law dating from 37 years ago that has hardly been revised to this day. It´s therefore still a legal tender in Spain. It concerns a mandate to the bank of the recipient to pay a certain amount in euros – the law still speaks of pesetas – to the recipient. In practice, a banker´s draft is issued by the bank during a purchase, whereby the bank first checks whether there is actually sufficient balance in the account and blocks this balance.

Many Spaniards have the idea that by obtaining a banker´s draft at the transfer, they have already received the money. However, this is incorrect. The money is still in the other party’s account and has yet to be transferred. If the banker´s draft is not cashed in Spain within the legal deadline of 15 days, the check can be withdrawn by the payer and the recipient will be left without money. Of course, the payment can be claimed afterwards by the recipient, but this is a lengthy process.

Using the bank draft has many drawbacks. You can only cash the banker´s draft through a Spanish or other foreign bank that still accepts them. Once you have found a bank that accepts the banker´s draft, it will take a few days for the money to appear in your account and, on top of that, a hefty commission is charged for receiving the money. This can be hundreds of euros.

The alternative

The best alternative to using a banker´s draft is to request a bank transfer to your account.

This can be a Spanish or any other international account. In the case of a transfer of real estate, the notary will attach the transfer to the deed in order to guarantee payment. When the transfer is made from another bank or from another country, it can take several days for the money to arrive. However, this is no different from a banker´s draft, as we have already indicated. Some transfers will be credited directly to your account, even though it may be an international payment. In Spain this is called an “OMF” transfer.

Don’t let the banks cheat you. An international transfer should not cost more than a national transfer. In addition, any transfer costs are for the account of the payer and usually not for the recipient, unless specifically opted for. The costs are therefore much lower than for a bank cheque and by submitting a proof of payment with all the details of the payment, it is better guaranteed that you will receive your money. The money has already been debited from the payer’s account the moment you receive the proof of payment. You don’t have to do anything more than wait for the money to be credited to your account.

Selena Escandell Beutick