The wire transfer is the quickest method of exchanging funds. They’re usually completed in 24 hours or less. If considering wire transfer, you’ll need to answer a few questions about your business. Let’s take a detailed look at the ins-and-outs of wire transfer.
Wire transfer is defined as the electronic transfer of money. The term “wire transfer” is in reference to bank wires, which are used to transfer funds between banks using a network such as CHIPS (Clearing House Interbank Payments System) or the Federal Reserve Wire Network.
Because you’re the transferor, the recipient will need your bank account number and routing number. It’s important to contact someone who works at your bank or credit union and inform them of your intentions, as your bank may need you to follow a specific set of instructions or provide the payee with additional details.
To wire money to a vendor or other recipient through a bank-to-bank transfer, you’ll need to acquire your bank account number, as well as the recipient’s name, bank account number and routing number. You’ll also need the recipient’s bank’s name and address. If transferring money internationally, you may need to ask the recipient for a SWIFT code, or a code provided by a similar network. You and your recipient shouldn’t hesitate to contact representatives from your respective banks.
Funds can be wire transferred online, over the phone, or in person at a bank. Be sure to provide your financial institution with detailed instructions including the amount to be transferred. The process may vary if utilizing a non-bank money transfer service such as National Processing or Bill.com, so be sure to familiarize yourself with your institution's methods and processes.
Wire transfers are typically final once the recipient’s bank accepts the transfer and has received the funds. It’s very difficult to reverse the process at this point, however there are a few exceptions.
A wire transfer is reversible if the bank that initiated the transfer made an error. For example, if the recipient received a larger sum than was intended or if the account name does not match up with the account number, that issue can be resolved. If the fault lies with your bank, they should be able to recall the funds.
If you initiate a wire transfer but need to cancel the transaction, you may be able to do so, but you’ll need to act swiftly. The Dodd-Frank Wall Street Reform and Consumer Protection Act states that consumers sending money internationally have the right to cancel their wire transfers without incurring a fee within a 30-minute period.
Transfers typically happen quickly. Generally, domestic bank wires are completed in three days, at most. If transfers occur between accounts at the same financial institution, they can take less than 24 hours. Wire transfers via a non-bank money transfer service may happen within minutes.
If you’re sending money to another country, it may take as many as five days for the recipient to receive their funds. To find out exactly how long it’ll take to receive funds from a wire transfer, you’ll need to check with your bank or credit union. If you’re in a rush, you can find out if there’s a way to expedite the process.
Occasionally, there are delays. If the bank sending the funds makes a mistake, a wire transfer may take longer than expected. Wire transfers can also be disrupted by holidays as well. Be prepared for delays if you’re receiving money from a slow-to-pay country such as Afghanistan or Cuba.
Certain nations are regarded as slow pay countries and wires from these nations can take several weeks to process. Additionally, incoming wires from some economically sanctioned nations are subject to scrutiny, delay or even rejection.
In order to send and receive international wire transfers a bank must have an International Bank Account Number, or IBAN. While multinational banks have IBANs, many smaller rural banks do not. Such banks use multi-national banks as intermediaries when sending international wires. The involvement of one or more intermediaries on either side of the transaction may cause the process to take a few days. Also, time differences between nations can cause further delays.
All wire transfers typically have processing fees. These fees vary by provider, but a good rule of thumb is that domestic wires will cost less than international wires. Incoming domestic wire transfers cost around $15, while outgoing domestic transfers range $25 to $30 or more. Outgoing international wire transfers may cost $45 to $50 or more.
Many U.S. banks have gotten into the practice of waiving fees for incoming wires and only charge account holders when sending a wire transfer. Be sure to check with your financial institution to see if their accounts generally or your particular account tier offers wire transfer fee waivers or reduced fees. You could also find that your bank charges a reduced wire transfer fee if you initiate the transfer through your online banking portal rather than visiting a branch and initiating the wire in person.
When sending a wire transfer through a nonbank provider, fees generally depend on the wire amount and several other factors. Nonbank providers have several additional fees that can impact the cost of a wire, including:
It’s a good practice to check all the fees before initiating a transfer.
Wire transfers are considered an extremely safe way to transfer money. Wires are secure transactions initiated by authorized personnel at your bank or non bank wire transfer service. One they’re initiated, they can’t be canceled. However, that means consumers should be hypervigilant about knowing the people to whom they send funds.
Many scam artists try to entice consumers to wire funds instead of mailing a check or using a credit card because bank wires can’t be canceled or reversed once initiated. The only exception to this rule is for international wire transfers, which can be canceled within 30 minutes of initiation.
Some electronic funds transfers are referred to as wires but aren’t processed through the most common bank and nonbank networks outlined above. These include:
When you’re looking for the best way to send money, it’s smart to review all of the options, from wire transfers to P2P payment tools, to find the safest and most cost-effective fit for your transaction.
Wire transfers are safe and secure and can help you get your money to its intended recipient with little delay. While the cost may be higher, you’ll have peace of mind knowing that your money will arrive on time and be ready to use without the banking holds that come with checks.
Settle can take the hassle out of invoicing and streamline payments, no matter how many vendors you have to take care of. Settle makes it simple to split payments and assign multiple invoice approvers to one invoice. Like they say, “Team work makes the dream work,” and what’s dreamier than an app that splits up your payments for you? Your team will be able to work on multiple invoices at once. No more asking for internal permissions over and over again.
Additionally, Settle seamlessly integrates with many of the most commonly invoicing applications, such as Quickbooks and Xero, allowing approvers to easily categorize transactions.
Wire transfers are an essential part of many businesses, but that doesn’t mean that the process for sending a wire transfer is the same for everyone. Pinpointing weaknesses in any wire transfer process doesn’t happen overnight and requires a bit of trial and error. But at the end of the day, businesses want faster and more efficient transfers in order to streamline cash flow management and scale more quickly.
Schedule a demo with Settle today and see how we can help facilitate faster wire transfers for your business.