Wire transfers are a common payment system that allows the transfer of money from one virtual wallet or bank to another account in the shortest time possible, typically one to two days. The process of wiring money is simple and straightforward. A wire transfer can be regarded as a type of bank wire transfer. The latter is a more traditional bank-to-bank network while wire transfer is the modern electronic transfer using the various payment systems such as Western Union. To fully understand how wire transfers work and all the instructions necessary for a complete transaction; below is a detailed guide- read on to get started.
Wire transfer technology
Wire transfer uses a sophisticated technology that allows financial institutions to communicate and execute various actions in real time regarding clients’ accounts. These transfers take not more than a day within national borders and at most two days for international transfers. The wire-procedure involves computerized and secure messaging system where account information, transaction requests, and notifications are conveyed conveniently.
During the transaction process, there’s no physical exchange or movement of money. In fact, banks and financial institutions pass information among each other regarding the recipients and the sender details; from the account numbers to the amount of money involved. One of the most important identification system used to verify the bank account numbers is the IBAN (International bank account number) system. The latter identifies legit financial institutions, even in a complex bank or wire transfer.
When to use wire transfer
Before making up your mind to use wire transfer, make sure it serves your intended purpose. Since the process is fast and it’s difficult to reverse the money once sent, you would want to use this payment system for well-defined transactions you’re confident about. Choosing the best money transfer provider shouldn’t be a difficult task. Some of the things to consider include the speed of transfers, fees, security and the global coverage (how many locations you can send and receive payment). More often, the cost of receiving a wire transfer is less than the cost of sending. This means the sender will incur a higher cost while the receiver may not be charged at all.
Crucial steps
When sending a wire, make sure you have all the receipt’s details. Contact your bank and seek to initiate the procedure. Depending on the most convenient method, you can fill out the paperwork or even do the entire task online. If receiving the money, you’ll still need to inform the bank receiving the money on your behalf. Here, you’ll initiate incoming wire transactions and wait for the funds to reflect in your bank account.
Again, wire transfers are considered safe and fast, but risks cannot be ruled out entirely, especially when sending money. Your safety and that of your money can easily be compromised only if someone else finds access to your bank account. To avoid such inconveniences, personalize your online banking passwords and always confirm the recipient details before initializing a transaction.
Wire transfers have gained popularity over the years, thanks to the fast and efficient transaction process. The working principle of this system is practical and less hectic compared to checks and the automated clearing house transfers.