Wire transfer or credit transfer is a method of transferring money from one person or institution (entity) to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office.

 

Process

Bank wire transfers are often the most expedient method for transferring funds between bank accounts. A bank wire transfer is effected as follows:

  1. The person wishing to do a transfer (or someone they have appointed and empowered financially to act on their behalf) goes to the bank and gives the bank the order to transfer a certain amount of money. IBAN and BIC code are given as well so the bank knows where the money needs to be sent to.
  2. The sending bank transmits a message, via a secure system (such as SWIFT), to the receiving bank, requesting that it effect payment according to the instructions given.
  3. The message also includes settlement instructions. The actual transfer is not instantaneous: funds may take several hours or even days to move from the sender's account to the receiver's account.
  4. Either the banks involved must hold a reciprocal account with each other, or the payment must be sent to a bank with such an account, a correspondent bank, for further benefit to the ultimate recipient.
     

Banks collect payment for the service from the sender as well as from the recipient. The sending bank typically collects a fee separate from the funds being transferred, while the receiving bank and intermediate banks through which the transfer travels deduct fees from the money being transferred so that the recipient receives less than when the sender sent.
 

As a representative example of the cost, Bank Of America in California in August 2009 charged $25 to send a wire and $15 to receive one within the US. For international transfer, it charged $35-$45 outgoing, $15 incoming.

 

Anonymous Wire Transfers

 

Due to know-your-customer/client (KYC) regulations it is not possible to achieve 100% complete anonymity for wire transfers.

 

 

 

What is an International Payment?

International Wire Transfer

SWIFT MT 103 Basic Format for Wire Transfer

 

 

 


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