There are a dozen ways to transfer money including cash, checks, mobile apps, and electronic transfers, according to different types of needs. When searching for effective and quick ways of transferring money, wire transfer is a leading option.
Wire transfer, also known as bank transfer, is a method of transferring money electronically via a network that is administered by banks and transfer service agencies around the world. The parties are not involved in the exchange of cash physically, rather they are in control of the process electronically and sometimes even from different geographic locations. Rather than cash, the participating institutions in wire transfer share data like bank account number and personal information. Once the information is documented the money goes from one bank to another using a network such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT). International wire payments are monitored by the Office of Foreign Assets Control and are considered fast, reliable, and generally safe. Wire transfers can be used for a variety of purposes such as homebuying transactions or sending funds to relatives abroad.
Generally there are two types of wire transfers: domestic and international. Both domestic and international wire transfers can be done within the same bank or with a secondary foreign bank. Domestic wire transfers take place between two different banks or parties within the same country, whereas international wire transfers are initiated in one country and settled in another. In the case of consumed time, domestic wire transfers can be received within a few hours while international transfers take almost two business days. For international transfers having a routing or SWIFT code is a must, however, domestic transfers do not require that.
Wire transfers are safe and secure to a large extent. Legitimate wire transfer services are under the supervision of Office of Foreign Assets Control to prevent terrorist activities or money laundering issues. The guidelines and rules of this service are quite strict and in case of any fraud or scam they would immediately freeze the funds. In order to maintain a secure electronic network, the two parties need to prove their identities. With all the above, you still need to keep an eye open for the wrong person or scam artists as there’s no guarantee you can get your money back if you are a victim of wire transfer fraud.
Wire transfers are very much safe compared to most ways of transferring money like checks. They happen in a short amount of time with the exception of international transfers which take at most 2 working days. On the other hand they are a good platform for hackers and frauds to easily target your money by a fake ID. In addition it is difficult for the sender to pull money back after it has been transferred.
ACH transfers and person-to-person (P2P) services are alternatives to wire transfers. ACH transfers are bank-to-bank transfers that move through the Automated Clearing House (ACH) network. ACH transfers are usually used for domestic low value payments, between participating financial institutions. P2P payment tools are money transfer apps, like PayPax which allow users to send money from their mobile devices through a linked bank account or card.