By Phillip Silitschanu
Wire transfers have been around for nearly a century and a half, and have grown into an enormous network of money transfers, today seeing on average over US$3 trillion wired every day.1 It is no wonder that businesses still turn to wire transfers when they have to send or receive funds from business to business, or country to country. Despite the widespread use of wire transfers, it is normal for businesses to sometimes still have questions about wire transfers, and we address some of them here:
A wire transfer is an electronic transfer of money (or currency) from one person (or business) to another. There are various ways to send a wire transfer, and some are faster than others. The fees associated with wire transfers can vary, depending on how quickly a sender would like the money delivered to the recipient. The term “wire transfer” originated in 1872, when existing telegraph networks (which were built with wires between cities) were used to send information about money transferred from and to persons in different locations.
A wire 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. Wire transfers are a fast and cost efficient way to transfer money, without having to send a check, money order, or cash.
Wire transfer fees can vary by bank, and from currency transfer service providers as well, with international wire transfer fees at banks generally being higher. Currently, for U.S. banks, the average wire transfer fee for a domestic incoming wire transfer is $15.50, and a domestic outgoing wire transfer is $27.50. The average wire transfer fee for an international incoming wire transfer is $18.00, while an international outgoing wire transfer is $47.50.2 For currency transfer services, these fees are generally much lower.
Virtually anyone can take advantage of the benefits of a wire transfer. An individual, or business, can quickly and easily transfer funds using a wire 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 The funds can be withdrawn directly from the sender’s bank account, or the sender can give the funds to be transferred as cash if the wire transfer service has a physical location.
Wire 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.
A wire transfer is one of the most secure and reliable ways to transfer money. It is very helpful for a business, as once a wire payment is received in the business’s account, that business can be certain that payment has been collected, and cannot be revoked or recalled. Unlike a check, a wire transfer does not take several days to clear; and while a check may appear to have been deposited and cleared, if a check is found to be improperly issued or presented, the depositor of the check may have the funds reversed. There is also the risk of a fraudulent check being presented, or a check “bouncing” for lack of funds. With a wire transfer, the sender of the wire must have the actual money in question present in their account (or as cash in hand) in order to initiate the wire transfer, in this way, when the wire is received by the recipient, they can be certain that the funds have actually been received into their account.
Sending or receiving a wire transfer is easy! A wire transfer service just needs some basic information from the business who wants to send a wire transfer (whether it is a domestic or International wire Transfer), such as its business name, account number, amount to be sent, etc.; as well as the corresponding information from the recipient of the wire transfer. It usually takes just a few minutes to set up and authorize a wire transfer.
Money transfers are not complicated, and are an easy and efficient way to transfer funds. They are an easy and useful way for business to transfer money from business to business, across town or across the globe.
Phillip Silitschanu is the founder of Lightship Strategies Consulting LLC, and CustomWhitePapers.com. Phillip has nearly 20 years as a thought leader and strategy consultant in global capital markets and financial services, and has authored numerous market analysis reports, as well as co-authoring Multi-Manager Funds: Long Only Strategies. He has also been quoted in the US Financial Times, The Wall Street Journal, Barron's, BusinessWeek, CNBC, and numerous other publications. Phillip holds a B.S. in finance from Boston University, a J.D. in law from Stetson University College of Law, and an M.B.A. from Babson College.