Electronic funds transfer has been available for nearly a century and a half, growing into an enormous global web of many interconnected networks. To get a sense of its scale, for example, the Reserve Bank of Australia reported the value of non-cash payments worth AU$227 billion per business day in 2015.1 It is no wonder that businesses turn to money transfers when they have to send or receive funds from business to business, or country to country. Yet despite their widespread use, it is normal for businesses to sometimes still have questions about money transfers.
What is a money transfer?
A money transfer is an electronic transfer of funds from one person (or business) to another. There are various ways to send a money transfer, and some are faster than others. The fees associated with money transfers can vary, depending on how quickly a sender would like the money delivered to the recipient. “Wire transfer”, the popular U.S. term, originated in 1872, when existing telegraph networks (which were built with wires between cities) were used to send information about money transferred to and from persons in different locations.
What is a money transfer used for?
A money transfer is used to send money from one person, or place, to another; it can be a transfer from one party to another across the street, or across the globe. Money transfers are a fast and cost-efficient way to transfer money, without having to send a cheque, bank draft or cash.
Who can send or receive a money transfer?
Virtually anyone can take advantage of the benefits of a money transfer. An individual or business can quickly and easily transfer funds using a money transfer. The funds can be withdrawn directly from the sender’s bank account, or the sender can give the funds to be transferred as cash if the money transfer service has a physical location.
What are the advantages of a money transfer?
Money transfers give an individual or a business the ability to quickly transfer and receive funds. This is especially useful when paying for goods and services from foreign vendors, so that a business can provide a timely payment to a vendor, to help receive delivery of the goods sooner. It can also help a business receive payment from a customer quickly and reliably, so that they can quickly deliver the goods and services their client is paying for.
How secure is a money transfer?
A money transfer is one of the most secure and reliable ways to transfer payments. It is very helpful for a business, as once a transfer is received in the business’ account, that business can be certain that payment has been collected and cannot be revoked or recalled. Unlike a cheque, a money transfer does not take several days to clear; and while a cheque may appear to have been deposited and cleared, if a cheque is found to be improperly issued or presented the depositor of the cheque may have the funds reversed. There is also the risk of a fraudulent cheque being presented, or a cheque “bouncing” for lack of funds. With a money transfer, the sender must have the actual money present in their account (or as cash in hand) in order to initiate the transfer. Thus, when the money is received by the recipient, they can be certain that the funds have actually been received into their account.
How easy is it to send or receive a money transfer?
Sending or receiving a money transfer is easy. A money transfer service needs only some basic information about the business who wants to send the funds (whether it is a domestic or international money transfer), such as the business name, account number, amount to be sent, etc.; as well as the corresponding information for the recipient of the payment. It usually takes only a few minutes to set up and authorise a money transfer.
