A wire transfer or bank transfer is a method of transferring of money from one bank account to another bank account. The transfer is solely done by the bank. Neither the sender and receiver sees how it was done. The wire transferring can be used both domestic and international transactions. No cash or cheques is being involved, but the account balance is directly (electronically) transferred from one bank to another. A transfer might be done to support relatives, rescue travelers in unexpected emergencies, or to pay a business transaction.

Since wire transfer is done bank-to-bank, is it considered as the safest international payment method. Both account holders must have a proven identity, and there is little possibility of a chargeback, although wires can be recalled. In additon, information contained in wires is transmitted securely through encrypted communications methods. The price of bank wire transfers vary widely depending on the bank and its location, and in some countries the fee associated with the service can be costly.

Wire transfers done through cash offices, however, are more-or-less anonymous and designed for funds transfer between persons who trust each other. It is unsafe to send money by wire for an unknown person to be collected at a cash office. The receiver of the funds may, after collecting them, simply disappear.

How the bank process the transfer? The sending bank transmits a secure message to the receiving bank, requesting that they effect payment in accordance with the instructions given. The message includes settlement instructions. Actual transfer of money is virtually instantaneous, requiring no longer for transmission than a telephone call. Both the sending and receiving banks must hold a reciprocal account with each other, or the payment must be sent to a bank with such an account, or a correspondent bank, for further benefit to the ultimate recipient.

Tips: Give information to your bank in writing to minimize errors. Make an initiative in making sure that the money is transferred within that day or in accordance to bank’s deadline. Make sure the funds are in the correct account you are wiring from, or the wire will not go through. Always ask how much the charge in wire transfer before proceeding. Wire transfers are not always immediate as depending on the location and how the bank’s do the process. So ask your bank when the funds will be transferred and when they will be received.

Steps on how to send money via wire transfer

1. Contact your bank by phone or via the Internet and provide the following information: the name of the person or firm you are wiring money to, the bank’s American Banking Association (ABA) routing number (which can be obtained from the recipient’s bank), the recipient’s account number, the address and phone number of the bank, and the name of the person to whom questions can be addressed.

2. Determine the amount of money you wish to wire and when it needs to be in the recipient’s account.

3. Complete the transaction through your bank. Some banks allow you to initiate the transaction via the Internet, while others require you to contact them by phone or fax.

4. Confirm that the transaction took place. Ask for a faxed or e-mailed transfer confirmation or contact the receiving bank to confirm receipt of funds.

Bookmark to: