What is a Wire Transfer: Your Complete Guide


 

If you need to send money to a friend or pay an invoice, you probably know there are quicker - and safer - ways to make your payment than using cash or mailing a check. Electronic payments such as wire transfers mean you can get your money to its destination easily, without even needing to leave your own home.

This guide walks through the key points you need to know -  including what info is needed for a wire transfer, and the typical wire transfer cost. Ready to learn how to do a wire transfer? Read on.

What is a wire transfer?

A wire transfer is an electronic payment which deposits funds directly into a recipient’s bank account. You can wire a payment to someone domestically in the US, or overseas - although it’s worth noting that the fees for sending and receiving international wire payments are typically high compared to local wires.

Wire payments are often used to conveniently move money online from one bank account directly to another. You can also arrange a wire transfer in person and pay cash at your bank or at a payment provider’s service office.

You might hear a wire transfer called simply a wire, a bank transfer or a credit transfer.

How to do a wire transfer?

You’ll be able to set up your wire transfer with your own bank directly, or through a third party provider. The exact steps will depend on the payment provider you choose to use - but you can expect the process to look something like this:

  • Choose the best service for your payment, comparing cost, convenience and speed
  • Pull together the information required to get your payment safely delivered 
  • Submit the transfer request - this may be an online form or you may need to go to a location to complete some paperwork in person
  • Check the details, costs and small print
  • Confirm the payment and keep all the details handy so you can track the money if needed 

What information is needed for a wire transfer?

No matter where you’re sending money, you’ll need to gather some details about the recipient and the specific payment to get started. Exactly what you need depends on the destination. For domestic wires within the US, you’ll usually need:

  • Name and address of the recipient
  • Name and address of the recipient’s bank
  • Recipient’s bank account number and bank routing number - also known as an ABA routing number
  • Amount you’re sending, in dollars
  • Reason for sending money

If you’re sending money overseas, you won’t need a routing number - but you’ll need a couple of extra pieces of information:

ABA routing numbers are used domestically within the US, but other countries have different systems to help your money arrive in the right place safely. For payments to Mexico, for example, you’ll be asked for a CLABE number, while Europe uses an international bank account number - IBAN. Check with your recipient, or their bank, to make sure you’ve got all the details required for your particular payment.

How long does an international wire transfer take?

Wire transfer durations vary widely according to the destination and the way the recipient’s bank processes the payment. Local bank transfers can be received quickly but international payments typically take 3 - 5 working days. 

If your payment is sent overseas using the SWIFT system, it’s likely to take a few days to arrive. Traditional banks usually use SWIFT to send money abroad. If you need your international payment to be processed quickly, it’s worth checking out specialist third party providers which can often move money quicker by avoiding the SWIFT network. 

How much does a wire transfer cost?

The amount you’ll pay for your wire transfer depends on the provider you choose. Typical bank charges for wire transfers within the US can come in at up to $30, with international payments higher at $50. You might find it’s cheaper if you arrange your payment online rather than in a branch. 

It’s also well worth shopping around - especially for international payments - as third party providers can often offer better value international wires which may even be quicker and more convenient than your own bank.

TransferWise offers fast, secure international transfers - with the mid-market exchange rate

What is the difference between a wire transfer and an electronic transfer?

Here’s a confusing point: wire transfer vs electronic transfer?

Luckily it’s not as complex as it often seems. Usually, electronic transfers are simply any payment which is moved digitally. This can include wire transfers, but also other payment methods such as ACH payments. 

Wire transfers are a specific type of electronic transfer. Wires are initiated immediately upon demand, rather than waiting until a fixed time like some electronic payment methods.

Can a wire transfer be reversed?

Wire transfers are normally processed immediately after they are requested. This can mean it’s impossible to get a reversed wire transfer.

If you’ve made a payment in error you’ll need to contact your bank. They may be able to help you reclaim the money - especially if it was paid out due to fraud. 

Online transfer alternatives

If you need to send a payment to someone you have a few options. You can use your regular bank - but you might actually get a better deal if you use an alternative provider. Shop around to compare your bank against different third party providers, especially if you’re sending money overseas.

For local payments funded with your bank account you could use a provider like PayPal or Venmo. Some local money transfers are free, and you’ll only need to know the recipient’s email or phone number to get started. There are a couple of drawbacks though - the recipient will usually need an account with the same provider for payments like these, and paying for your transfer using a card means you’re hit with fees.

If you’re sending money abroad, there are a range of other options available including TransferWise

TransferWise uses a transparent fee structure and gives customers the mid-market exchange rate. That’s the same rate you’ll find on Google. There are no hidden costs and no nasty surprises. In fact, you can see exactly what your recipient will get before you confirm the transfer. Simple. 

Wire transfers don’t need to be confusing. But finding the best service for your payment might take a little homework. Use our guide to start you off, and do a little research to find the best provider for your needs.