What is a Wire Transfer?

When you want to move money quickly, a wire transfer will often be your best option. How long a wire transfer takes depends on the situation, so it's important to understand how they work and what affects their speed.

What is a Wire Transfer?

A wire transfer is a direct funds transfer completed electronically, managed through one bank or financial institution, and sent to the desired recipient. There are hundreds of banks, financial institutions, and transfer service agencies worldwide that administer wire transfers. For example, Western Union, an American multinational financial services company, allows you to initiate this type of electronic payment—even through a mobile app.

The primary purpose of a wire transfer is to transmit funds from an individual or business to another individual or business as quickly and securely as possible. It's also a means of sending money across great geographical distances without the need for the physical mailing of cash and checks.

Generally, wire transfers follow a set of basic rules. The sender pays any fees associated with the transaction and is required to provide the recipient’s name, recipient’s bank account number, routing number, and payment amount to the financial institution or transfer service agency administering the transaction. International transfers may need a Society For Worldwide Interbank Financial Telecommunication or SWIFT code (sometimes also called BIC number, or Business Identifier Codes) as well as an international bank account number (IBAN).

Wire transfers are usually processed in one to two business days, and all international wire transfers are carefully monitored by a government body known as the Office of Foreign Assets Control (OFAC). OFAC's primary duty is to ensure that money isn't being wired overseas for nefarious purposes, such as the funding of terrorist groups or to launder money obtained through illegal means.

Cash Wire Transfers

Wire transfers can also be initiated with a cash payment. The sender must go to a physical location where wire transfers can be processed. They'll then pay the amount of cash they wish to send plus any required fees to the wire transfer service agency. The sender also needs to provide the information of their recipient. Wire transfers initiated with cash usually carry roughly the same fees and processing times as those processed entirely online.

A common reason for using a cash wire transfer is not having a checking account. In addition, some financial institutions, such as smaller credit unions, may not support wire transfers or have a very inconvenient process to transfer money. Finally, it may just be a matter of finding the lowest fee to send a wire transfer.

Wire Transfers Explained

In most cases, wire transfers involve the movement of funds from one financial institution to another, domestically or internationally. In the truest terms, a wire transfer is nothing more than a transfer of information and funds—the sender and recipient exchange information about the money being sent, where it originated, and where it's going. The relevant accounts are then updated to reflect this change of status.

Once a wire transfer is initiated after being set up and paid for by the sender, the recipient's financial institution receives a transfer notification. Most domestic wire transfers go through the Clearing House Interbank Payments System (CHIPS). CHIPS is an electronic system that allows banks to settle interbank transactions without the need to exchange checks. International transfers go through a similar process, but foreign countries often have their system with a third intermediary bank that links up the American banking system with the foreign banking system.

In many cases, money doesn't even move between banks. For example, if one person wires $1,000 out of Bank of America to Chase and another person does a separate wire in reverse, each bank simply keeps $1,000 and credits their recipient's bank account. When transfers don't balance out, the two banks settle the difference behind the scenes. To the individuals or businesses sending and receiving the money, it appears on the surface as simply money going from 'my' account to 'your' account.

How Long Does a Wire Transfer Take?

Wire transfers take up to two days to process, and if a payment made online takes longer than this, it's legally not considered a wire transfer. Usually, wire transfers are processed more quickly than the two-day window.

Domestic wire transfers, for example, are usually received within a few hours of being initiated—to the senders and recipients, they can appear to occur almost instantaneously. The main exception is when someone initiates a wire transfer after their bank's cut-off time, and the transfer gets held until the next business day.

International wire transfers, on the other hand, can take longer. The two-day rule normally applies, but funds from an incoming wire transfer may not be available for five days or longer in rare cases. Why? Because of something known as Automated Clearing Houses.

Automated Clearing Houses (ACH) are automatic systems set up to vet incoming and outgoing payments via wire transfer. In domestic transfers, there's just one ACH to clear—the domestic ACH. International wire transfers must clear two regulatory checkpoints—the domestic ACH of the sender, and the foreign ACH of the recipient. This is what causes international wire transfers to tend to take longer than those sent domestically.

How Much Does a Wire Transfer Cost?

While wire transfers are extremely fast and convenient for making secure payments digitally, they're not cheap. The fees for sending bank wire transfers can be significant—usually between $25 and $35 for domestic transactions and up to $50 for international transactions. The receiving bank may also charge a fee for an income wire transfer. The average incoming wire transfer fees are $13 for domestic wires and $15 for international wires.

There may also be costs to exchange foreign currency when you send international wire transfers. Many banks charge a small spread on exchange rates, so you pay slightly more or receive slightly less than the current exchange rate. They may also charge additional fees like currency exchange fees.

Benefits of Wire Transfers

While wire transfers are one of the more expensive ways to move money, they have several benefits that make them worthwhile. There are two main reasons why people wire money in both business and personal transfers.


One of the primary benefits of wire transfers is their speed. In business situations where deals can be made or lost in minutes, the ability to almost instantaneously send and receive payments can be vital. Almost any other form of payment from a sender to a domestic recipient could take several days or weeks to be fully processed. Even ACH transfers aren't always guaranteed to clear quickly. This speed also keeps the flow of goods and services moving—the faster a vendor can receive payment, the more quickly the payer or buyer can receive the product or service they need.

Wire transfers are almost always available except for bank holidays. And, if your account is large enough and you plan ahead, your bank will usually work with you to meet your needs if you need to send electronic transfers at unusual times.


Wire transfers are also preferred due to the finality of payment. Once the transfer is complete, it can't be reversed. Unlike credit cards or even ACH transfers, an outgoing wire transfer is nearly identical to handing over physical cash. If a recipient wants to refund the payment to the sender, they must initiate an entirely new payment for the amount in question, flowing in the opposite direction. When a company receives a wire transfer, they know that the money is in-hand and that no misdirection or fraudulent activity can reverse it.

Is Sending Wire Transfers Easy?

Sending wire transfers is easy, as is receiving them. All that's required to initiate a transfer is the following information: the recipient's account information, full name or business name, and the amount to be sent. Many banks allow customers to initiate wire transfers through online banking, while others require a phone call or faxed form. The average wire transfer can be initiated and sent in just a few minutes.

If you're receiving a wire transfer, all you need to do is make sure you have an account type that allows incoming wire transfers (most checking accounts work) and then give the sender your wire transfer information. After that, the money appears in your account just like a direct deposit.

See How Can Help Your Business With a Risk-Free Trial makes it easy to manage your accounts payable and accounts receivable. You can automatically track the bills you have to pay and what customers owe you. Multiple payment options, including wire transfers, are available for both senders and receivers. To learn more about the available features and how they can help your business, start your risk-free trial now.

The content found here is for informational purposes only, and not for the purpose of providing advice, including but not limited to, financial, legal, or tax advice. Any opinion found here does not necessarily represent those of

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