What is a wire transfer?
A wire transfer is defined as the electronic transfer of money and refers 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.
How to wire money
When you’re wiring money to someone, 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:
- Your bank account number
- The recipient’s name
- The recipient’s bank account number
- The recipient’s bank routing number
- The recipient’s bank 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.
You can initiate wire transfers 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 nonbank money transfer service such as National Processing, so be sure to familiarize yourself with your institution's methods and processes such as cut-off times.
Can you cancel a wire transfer?
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, but there are a few exceptions:
- 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.
- If you initiate an international wire transfer, you can cancel it without incurring a fee within 30 minutes of sending it.
How long do wire transfers take?
Transfers typically happen quickly. Generally, domestic bank wires are completed within one business day, 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 business 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 weekends and public holidays as well. Be prepared for delays if you’re receiving money from a slow-to-pay country such as Afghanistan or Cuba.
How long do international wire transfers take?
International wire transfers generally take up to five business days. However, 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.
To send and receive international 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 business days. Time differences between nations can cause further delays.
How much are wire transfer fees?
All wire transfers typically have processing fees. While fees vary by provider, domestic wires usually cost less than international wires. Incoming domestic wire transfers cost around $15, while outgoing domestic transfers range from $25 to $30 or more. Outgoing international wire transfers may cost $45 to $50 or more.
Many U.S. banks will waive 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. Some banks also charge reduced fees if you use their online banking portal rather than visit a branch in person.
When sending a wire transfer through a nonbank provider, fees generally depend on the wire amount and several other factors. Nonbank providers also take into account:
- How you fund your wire: There are different fees for using credit cards, debit cards, and funding directly through your bank account.
- Loyalty programs: Patrons can earn points when they send money and then redeem points for reduced fees.
Remember to check all the fees before initiating a transfer.
Are wire transfers safe?
Wire transfers are an extremely safe way to transfer money. Wires are secure transactions initiated by authorized personnel at your bank or nonbank wire transfer service. Once they’re initiated, they can’t be canceled. That means consumers should be hypervigilant about knowing the people to whom they send funds to avoid money laundering.
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.
Alternatives to wire transfers
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:
- ACH transactions, like electronic checks and bill payments, are processed through the Automated Clearing House
- Peer-to-peer payment tools, like Paypal, Cash App, or Venmo, allow you to send money directly to people, often without a bank account
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.
Benefits of wire transfers
Wire transfers are safe, secure, and convenient. Not only can they help you get your money to its intended recipient with little delay, but they also allow you to transfer funds without being in the same geographic location as your recipient
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.
The Takeaway
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.
Settle Can Help
Settle can take the hassle out of automating your AP and streamlines your vendor payments in a fast, secure way, no matter how many vendors you have to take care of. Settle's AP automation allows you to pay your vendors how your want with low-cost wire transfers and speedy ACH payments (one to two business days). Settle makes it simple to split payments and assign multiple invoice approvers to one invoice. 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 common accounting software programs allowing approvers to easily categorize transactions.
Get a demo with Settle today and learn more on how we can help facilitate faster wire transfers for your business.
Sources:
- https://www.forbes.com/advisor/banking/all-about-wire-transfers/
- https://smartasset.com/checking-account/how-long-does-a-wire-transfer-take
- https://www.thebalance.com/best-ways-to-transfer-money-between-bank-accounts-315466
