What is a wire transfer: A thorough overview

6 minute read

Need to send money to friends or family? Or maybe you have to make a large transfer as a downpayment on a new home?

Wire transfers may be a good choice if you need to have your transfer processed quickly - although you’ll often find there’s a fee to pay for the service. Here’s all you need to know about wire transfers, how they work - and what they cost.

Table of contents:

What is a wire transfer, exactly?

Wire transfers are a way to move money from one bank to another electronically. That means there’s no need to handle cash or a check. You may not even need to visit your bank in person to set up a payment, if you have online banking. You might also hear people talking about bank transfers, or credit transfers - usually these phrases will all refer to the same process.

Electronic transfers like these are usually arranged using the SWIFT¹ (Society for Worldwide Interbank Financial Telecommunication) or Fedwire² networks. These networks allow banks to securely transmit messages and money both domestically and internationally.

It’s worth noting that wire transfers to accounts held in other currencies, or in other countries, are often processed using the SWIFT network. This has some drawbacks. SWIFT payments can be fairly slow and costly, as they involve several banks working together to pass the payment along - much like a series of connecting flights to get to a destination. However, each bank involved can deduct a handling fee if they choose to, which can lead to extra charges.

For international payments you may may want to try out TransferWise. TransferWise is a modern way of sending money abroad, which doesn’t come with the overheads of the SWIFT system. That means that sending money with TransferWise - and using the TransferWise multi-currency account to send and receive payments - can be cheaper than regular wires. More on that later.

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How fast are wire transfers?

Domestic wire transfers are usually received quickly once they have been processed by the bank. Fedwire, for example, states that wire instructions are settled immediately on receipt.

Most banks have cut off times, after which wire transfer requests may not be processed until the next business day. Get your wire transfer set up in the morning to make sure it’s processed quickly by your own bank, and gets to your recipient in good time.

International wire transfers are more complex, and so tend to take a little longer. When sending an international wire via SWIFT or Fedwire, your payment will often need to pass through several correspondent banks - also known as intermediaries - before being received³. This process can take a few working days, depending on the procedures and cut off times of each intermediary bank.

There’s no waiting time for funds to clear

One advantage of wire transfers over an alternative like ACH payments, is that there is no clearing time to worry about. This means you’ll get your money as soon as the wire has been processed.

That makes wires faster than ACH payments, and also much safer than using a check, for example. If you’re paid using a check which bounces, you may not even know this has happened until much later.

Time to process a wire

Usually domestic wire payments are completed on the same day they are arranged, as long as the wire is initiated before the day’s cut off time.

That said, it can take several hours for the funds to show up in the recipient’s account, depending on the recipient bank’s own processes.

What information is needed for a wire transfer?

You’ll often be able to set up your wire transfer via your online banking system - although some banks may still require you to visit in person and hand over details in a branch.

Usually, the information needed is quite similar, regardless of who you bank with. For example, Bank of America’s required information includes⁴:

  • Account number
  • Wire transfer routing number
  • SWIFT code for international transfers

Depending on where you’re sending money to, you might also need to provide additional details such as the source of funds or reason for payment, to comply with the laws in your destination country.

It’s common for banks to charge for sending and receiving wire payments. The exact fee will depend on your bank and account type. Incoming wires may cost around $15, with outgoing domestic wires $20-$30, and outgoing international wires more costly again, at around $30-$50.⁵

Remember, you may be charged an even higher fee - including interest and a cash advance charge - if you fund your wire payment with a credit card.

How safe are wire transfers?

Wire transfers are fairly safe, because banks have to confirm the identity of their customers when they open an account. You’ll need to double check you have the correct account information before you send a wire transfer. And naturally, be wary of anything unusual about the payment - fraudsters are sophisticated, and you can still be caught out even with a relatively safe method of transmitting money.

Paying for property

There have been scams which involve people paying a down payment for a property - large transfers which are lucrative if hackers or fraudsters can intercept them. Double check the details you’re being asked to use when sending a large wire transfer. As hackers could target and change emails, you’ll want to call your recipient to check the details you have are correct - even if they’ve been emailed to you.

Receiving money

Wire transfers can’t easily be reversed once they’re processed. However, other types of payments may be cancelled from the sender’s side.

If you’re making a sale and receiving payment directly to your bank account, call your bank to make sure the payment was made by wire transfer - and therefore can’t be easily reclaimed - before you release the goods you’re selling.

Other online transfer types

If a wire payment isn’t the right option for you, you have a few other alternatives. Let’s take a quick look at the most popular.

Money Transfer Services

Another way to make a payment to someone is to use a money transfer service like Western Union and MoneyGram. These services may allow you to make a payment directly from your bank account, into the account of another recipient. In that way, they look similar to a regular wire. However, it’s worth noting that there may be additional fees compared to a wire arranged directly with your bank, which you’ll need to check.

Western Union, for example, notes that you may pay additional bank fees for funding payments through a bank wire, and the payment may not be allowed if it originates from a business account.⁶

ACH transfer

ACH transfers are used in many situations - when employers pay salaries, or when you get a tax refund, for example⁷. ACH payments are electronic payments, similar to wire transfers, but the transfer must clear before it is accessible by the recipient. This means it may take longer than a wire - although fees are usually lower, or even free.⁸

Apps and peer-to-peer payment methods

Other quick and easy ways to send money include peer to peer payment options like Venmo⁹ and PayPal¹⁰. You may also want to look at specialist payment providers and apps, such as TransferWise for low cost international transfers.

Businesses can save up to 19x compared to PayPal with TransferWise. Join over 7 million businesses and personal users already saving with TransferWise.

Venmo offers payments between people based in the US, with a local US cell number¹¹. PayPal can provide both domestic and international payments, but the fees for making a cross border payment are complex and fairly high.¹²

If you want to send money to someone based abroad, it’s smart to shop around as there are many different providers, offering varying fees. Check out the TransferWise multi-currency account as a simple way to hold foreign currencies, and send and receive payments. This can work out much cheaper than sending regular international wires, or using an alternative provider.

Wire transfers may be a good choice - particularly if you’re sending money domestically, and need the payment to be received quickly. It’s worth investing some time in research before you get started, to make sure you know the fees you’ll need to pay, and find the best deal available for your payment.


  1. SWIFT
  2. Fedwire
  3. Fedwire Fedwire® Funds Service International Wires Webinar - December 19, 2017
  4. Bank of America Wire Transfer FAQs: What is a Wire Transfer?
  5. Finder Wire transfer fees for 10 major US banks
  6. Western Union What is wire transfer payment option
  7. Nacha.org What is ACH?
  8. The Balance Key Differences Between ACH and Wire Transfers
  9. Venmo
  10. PayPal
  11. Venmo Requirements to use Venmo
  12. PayPal Credit Card Fees, Send Money Fees & Other Charges

Sources checked on April 23, 2020

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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