Businesses often use wire transfers, also known as remittance transfers, for transactions that are large, critical, or international. Domestic wires (within the same country) are typically faster than international wire transfers.
Wire transfers are trusted for their speed and security. You can quickly send money and expect it to arrive in the correct bank account for the correct amount within a day or two. Wire transfers are frequently used to close business deals or real estate transactions.
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.
Wire transfers use bank-to-bank connections to exchange funds in a rapid and secure way, no matter your location. They are a fast way to send or receive money electronically. Within the US, these transfers take less than 24 hours to clear. International wire transfers usually take two business days, but depending on the destination and when you send the transfer, they can take up to five days.
How do wire transfers work?
Wire transfers are essentially data communicated from one bank or financial institution to another. A communication network is used for this exchange, most likely the Society for Worldwide Interbank Financial Telecommunication (aka SWIFT), but others like Fedwire are common.
The issuing institution will send the name, total, bank accounts, and routing numbers to the receiving institution. When a wire transfer comes into the receiving institution, an employee usually needs to go through a few simple steps to confirm and complete the transfer.
Wire transfers vs. ACH transfers
Sending a wire transfer is faster than an ACH transfer (short for Automated Clearing House). Both involve the bank-to-bank transfer of funds between accounts, but an ACH transfer typically takes 2–3 days and is usually less expensive.
Learn more about ACH vs. wire transfers.
Are wire transfers safe?
Wire transfers are considered safe—as long as you verify the receiving party.
Wire transfers can only be completed by the initiating party, so a wire transfer will never take money from your account or compromise your information without your action.
The only real danger of a wire transfer is that it's essentially irreversible once sent. Wire transfers deliver almost instantaneously and they will reliably arrive in the account you specified. This can be a problem if you provided the wrong information or if you were deceived by the receiving party.
How to submit a wire transfer
Once you've made the decision to wire money, take the time to carefully complete the following steps:
- Gather your information: How much money is being sent? Where is it being sent? You'll need bank account details—including the account number of the sending and receiving accounts—identity verification (such as a driver’s license), detailed contact information, totals, and dates for submission. Check the section below for more details about the information you’ll need.
- Work with your bank or institution: Once you’ve chosen an institution, call them or go into their establishment to verify the details of their wire transfer services, and their wire transfer fees.
- Submit the domestic or international transfer: You'll likely fill out a paper or online form and cover the wire transfer fee, if applicable. Once submitted, the bank or institution will give you a receipt and confirmation that the transfer has been completed.
The steps for wiring money may vary depending on the institution, and international wire transfers will include steps regarding currency and clearances in the destination country.
Information required to send a wire transfer
Before you contact your bank to initiate a wire transfer, gather the information listed below about your recipient and their bank to avoid delays:
- Full name and address
- Bank name, address, and telephone number
- Bank account number and account type (e.g., checking or savings)
- Bank ABA routing number (for domestic transfers)
- Bank IBAN and BIC/SWIFT codes (for international transfers)
Additionally, be prepared with details about the dollar amount to be transferred, the currencies involved (e.g., sending US dollars to be received in euros), and the reason for your transfer.
An ABA routing number is a nine-digit number established by the American Bankers Association based on the location of a US bank. Some banks have specific routing numbers for wire transfers as well.
An IBAN or international bank account number includes a combination of 34 letters and numbers that help identify countries and branch locations for cross-border transfers.
A BIC/SWIFT code is 8–11 characters used to identify an international transaction at a specific bank.
Wire transfer example
Here's an example of a wire transfer.
Suppose you want to send $2,200 to a friend in another state. You'll need to gather the following information from your friend:
- Recipient’s full name or company name: John Smith
- Bank name: IJK Bank
- Routing number: 123456789
- Account number: 123456789012
Next, you'll need to contact your bank and provide them with the required information to initiate the wire transfer—your own account information as well as the recipient's information. Payment for fees may apply at the time of transfer.
Pros and cons of wire transfers
Wire transfers are often the only option for international money transfers, or for very large transfers that exceed the limits of an ACH transfer. That’s why wire transfers are frequently used for businesses sending or receiving funding, closing large real estate deals, acquisitions, and other large business transactions.
Pros
- Completed within hours
- Immediate access to funds
- Large transactions
- International transfer capability
Drawbacks of wire transfers include the fees, information and effort required to send the funds, and that the exchange of funds is usually irreversible.
Cons
- Costs around $27 on average
- Effort and time to submit
- Irreversible and difficult to cancel
- Commonly used in scams
Because they're irreversible, scammers often target consumers using wire transfers, so don't conduct a wire transfer—or any money transfer, for that matter—unless you’re 100% certain of the receiving party and their intentions.
How long does a wire transfer take?
Wire transfers within the US take less than 24 hours, while international transfers can take up to five days.
There are three main factors that affect the speed of a wire transfer.
1. When you initiate the transfer (time of day matters)
- Federal regulations: The Expedited Funds Availability Act (EFAA) requires U.S. financial institutions to make wire transfers available to recipients within one business day. Banks and credit unions set their own cut-off times for receiving daily wire transfers, which may differ from branch closing times and even cut-off times for deposits.
- Bank cut-off times: If your bank’s final cut-off for wire transfers is 3 p.m. and you initiate a transfer at 3:05 on Wednesday, funds will be recorded as having been received on Thursday, which could delay completion until Friday.
- Weekends and holidays: When estimating how long your wire transfer may take, keep in mind that transfers can’t be completed on weekends or federal bank holidays.
2. Where you’re sending or receiving funds
- Domestic wire transfer: Due to EFAA regulations, most bank-to-bank wire transfers between accounts in the US are completed within 24 hours. Some banks make wired funds available to recipients immediately, especially on transfers between accounts at the same institution.
- International wire transfer: An international wire transfer between a US bank account and an account in another country (also known as a remittance transfer) takes approximately one to five business days, depending on differences in time zones, foreign currencies, and banking systems.
- Slow-to-pay countries: Countries with a slow-to-pay designation may delay transfers up to three weeks or even cancel them. When sending or receiving funds internationally, ask your bank for a current list of slow-to-pay countries so you know what to expect.
3. The method of bank transfer
- FedWire for immediate transfer: For large-value or time-sensitive wire transfers between US institutions, banks use the FedWire system for real-time gross settlement (RTGS), which means the transfer is processed immediately.
- CHIPS for batch transfer: Banks also use the Clearing House Interbank Payments System (CHIPS) for net settlement, which processes multiple transactions as part of a batch process. Some banks have several daily cut-off times for wire transfers and send multiple daily batches.
- SWIFT for international transfer: While CHIPS can be used to process international wires, more than 10,000 banks and other financial services providers also use a secure network managed by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). When international transfers can’t be processed directly between two banks, SWIFT makes it possible for money to pass through intermediary or correspondent banks.
How to track a wire transfer
What do you do when a transfer is delayed or lost?
Every wire transfer to or from a U.S. bank account passes through the Federal Reserve Bank where the transaction is assigned a unique IMAD/OMAD ID. If a wire transfer between US bank accounts takes more than 24 hours, or a transfer between a US and international account takes more than five days, ask your bank to trace the wire using the IMAD/OMAD ID assigned when the wire was sent.
The tracer will show how and when the transfer was processed between sending, receiving, and intermediary banks, and, most importantly, where it is now. In the unlikely event your wire goes to the wrong account, this is how you can find it.
Domestic & international wire transfers
Domestic wire transfers are those taking place within the same country. Domestic wire transfers are usually lower in cost and can be delivered the same day. In fact, domestic transfers can show up in the receiving account within just hours. Domestic wire transfers can cost you $0–25 per transfer depending on your institution. Online banking solutions may include domestic wire transfers—just check with your bank.
International wire transfers are more expensive and take longer. International wire transfers have to run through ACH transfers as well as through any institutions in the receiving foreign country, which varies. You can expect an international wire transfer fee of $35–45 per transfer. The issuing institution, such as Chase Global Transfer, may complete its own internal reviews and verifications. There may also be fees or conversion factors to change the funds to foreign currency.
How long does an international wire transfer take? International wire transfers usually take two business days, but depending on the destination and when you send the transfer, it can take up to five days.
How to cancel a wire transfer
Once initiated, the funds transfer is guaranteed. A transaction can only be stopped if the receiving bank gets a cancellation notice from the sending bank before instructions are processed to complete the transfer.
If a mistake is made by the sending or receiving bank, including duplication of a previous order or the transfer of the wrong dollar amount, they will reverse or adjust a completed transfer.
How much does a wire transfer cost?
One drawback of a wire transfer: it will cost you. Due to the immediacy and manual nature of how a wire transfer is sent, there are fees associated with sending a wire transfer, and sometimes receiving a wire transfer as well. How much it will cost you will depend on many factors, such as your bank’s policy, where the transfer is being received, urgency, size of transfer, and if it’s a credit or cash transfer.
Average wire transfer costs
- Domestic outgoing wire transfer: $27 average
- Domestic incoming wire transfer: $15 average
- International outgoing wire transfer: $45 average
- International incoming wire transfer: $15 average
If you fund a wire transfer through a credit card, it's defined as a cash advance. Cash advances will incur fees as well as interest rates, on top of the fees from whatever institution is sending the wire transfer.
Receiving a wire transfer is usually free, but occasionally requires a small (less than $20) fee for access and completion. There may be fees or special calculations for foreign currency. If you’re planning on sending money via wire transfer regularly, it may be smart to consider sending larger funds less frequently to minimize the cost for sender and receiver.
A wire transfer fee varies based on the type of account you hold, whether you use online or in-branch services, and whether you transfer funds in U.S. dollars or a foreign currency. The sender pays to initiate the transaction, and the recipient pays to receive it.
Are wire transfers reported to the IRS?
The IRS may be interested in wire transfers made in regular intervals, to individuals without personal or business bank accounts, or in very large amounts. The IRS is able to see any wire transfers through US banks or US citizens, and banks are required to report any suspicious activity they see through wire transfers.
Investopedia reports that international wire transfers are closely watched by multiple international organizations, including the Office of Foreign Assets (part of the US Treasury), to prevent money being transferred illegally for money laundering or to a terrorist organization, for example.
Alternatives to wire transfers
Wire transfers are not your only option for electronically moving money from one account to another. There are a wide range of tools for managing and transferring funds to meet your exact needs.
The best alternative to a wire transfer is an ACH transfer or using an online application payment service such as Paypal, Zelle, Venmo, or other similar service.
Banks can also offer wire transfer alternatives, such as depositing cash into the individual’s account at a branch of the bank they use, creating a bank draft, or drawing up a money order. Various methods can be conducted through the mail (money orders, checks, cash mail) but are obviously less secure and very unpredictable.
How to send a wire transfer with BILL International Payments
It’s easy to send international wire transfers with BILL International Payments. Just include the destination country when you set up your vendor. Then, when it’s time to pay them, you can use the same workflow and dashboard you use for your domestic payments.
It’s really that simple. BILL even lets you track your international wire transfers at no extra charge.
We know you take your money management and funds transfers seriously—we’re here to help you streamline and automate your financial operations for maximum visibility and control.
To learn more, schedule a live demo.
FAQs
How much can you wire transfer?
The maximum amount you can wire transfer may vary depending on your bank's policies and the country in which you are sending the money. Typically, there are no limits on the amount of money you can wire transfer, but some banks may have maximum limits to prevent fraud or money laundering.
Are wire transfers reported to the IRS?
The IRS may be interested in wire transfers made in regular intervals, to individuals without personal or business bank accounts, or in very large amounts. The IRS is able to see any wire transfers through US banks or US citizens, and banks are required to report any suspicious activity they see through wire transfers.
How to receive a wire transfer
Receiving wire transfers is just as easy as sending them. 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. To receive a wire transfer, follow these steps:
- Provide the sender with your bank information: Give your name, bank name, bank account number, and routing number.
- Verify the transfer: Once the sender initiates the wire transfer, it may take one or more business days to reach your bank account. Check your account balance to confirm that the funds have been received.
- Resolve any fees: Your bank may charge a fee to receive a wire transfer. Check your account statement or contact your bank to confirm any fees associated with the transfer.
Withdraw the funds (optional): Once the funds have been received, you can withdraw the money from your account.