What Is a Wire Transfer? How it Works, Safety, and Fees

There are various popular options available these days for transferring money overseas, and one of those is through wire transfer. Whether you need to pay suppliers, contractors, or employees abroad, how much do you know about wire transfers: what is a wire transfer? how does it work? and is it safe or not? In this article, our DNBC Financial Group will help you have a clear view of wire transfers.

What Is a Wire Transfer? How it Works, Safety, and Fees

What is a wire transfer?

A wire transfer, also known as a bank transfer, wire payment, or bank wire, is an electronic transfer of money from one person, business, or organization to another. In other words, money is transferred from one bank or financial institution to another, with the sending and receiving institutions adhering to a set of financial protocols to ensure funds are deposited to the intended recipient.

Because money is transferred electronically while using wire transfers, you don’t need to have any physical cash in hand. However, money must be available in the bank account involved at the moment of the transfer.

Types of wire transfers

There are two types of wire transfers: domestic and international. It can be useful to understand how each works depending on who you’re sending money to or where you’re getting payments from.

Domestic wire transfers

Domestic wire transfers are accomplished when money is transferred from one bank account in the same country to another. They can be completed in 1 – 3 business days.

International wire transfers

International wire transfers, often known as remittance transfers, occur when funds are transferred from one bank account to another in a different country. A European family member might get money from the United States via an international wire transfer, for instance.

It could take a little bit longer to transfer money internationally than domestically. Additionally, international wire transfers may cost more. Some receiving institutions will also charge a fee, which will be deducted from the total amount received by the customer.

Currency conversion options may also be available with international transfers, such as converting from US dollars to British pounds. But doing so may cost money.

How the wire transfer works

You aren’t moving money from one banking institution to another when you wire money. Given that the wire transfer is electronic, a bank can complete the transaction if it is aware of the recipient’s identity and the amount that will be sent to him or her. The money is available quite soon once the transfer is made.

What information is needed for international wire transfer?

Typically, the following details will be required from you when sending a wire transfer by the bank:

The recipient and sender’s full name

The recipient and sender’s phone number

The recipient’s address

The recipient’s bank name and information

The recipient’s checking account information

The recipient’s international bank account number (IBAN), BIC, or SWIFT code.

Banks and other financial institutions are identified globally via SWIFT/BIC codes. These codes are used to send and receive messages between banks and are frequently used for international wire transfers and SEPA payments.

You can enter this data on a form online or in a physical branch.

Besides that, your financial institution may also ask you why you are sending the money. If the sending or receiving bank requests more details, be prepared to provide them.

At DNBC Financial Group, we offer SWIFT as well as SEPA transfers, allowing customers to transfer up to 200.000 EUR/day with a personal account and 500.000 EUR/day with a business account. Currently, 170 nations and territories around the world, including the UK, the EU, Japan, Switzerland, Finland, the UAE, Singapore, Malaysia, Hong Kong, India, Norway, Germany, France, Canada, Australia, and many others, are supported by DNBC Financial Group for international transfers.

Is it safe to use wire transfers?

In general, wire transfers are secure as long as you know who will be receiving them. Each party to a wire transfer transaction should be required to provide identification documentation if using a legitimate wire transfer service to prevent anonymous transactions. The agency ensures that funds sent overseas are not used for terrorist activities or money laundering.

The sending bank has the right to freeze the funds and terminate the wire transfer if they suspect that any of these possibilities is true.

Wire transfers can be flagged for numerous reasons, alerting authorities to potential misbehavior on the part of either the recipient or the sender.

About DNBC Financial Group

Founded in 2017, DNBC Financial Group is a global leader in money transfer services. We’ve evolved quickly to help people all around the world by reducing the cost of transferring and spending money overseas, collecting payments from worldwide consumers, moving funds between international operations, and reducing the risk of currency changes.