Wire Transfers for Global B2B Payments

Payment Method Guide

Wire transfers, also called “credit transfers,” are an interbank payment method. They are highly favored for their reliability and speed since they provide a direct connection from one bank account to another. Wire transfers are also well equipped to handle the vagaries of cross-border transactions.

However, wire transfers are the most expensive method for remitting funds (short of hand delivering cash). In addition, there is usually a transaction fee for both the sender and receiver. Also, should a payment fail, wires transfer failures can be more expensive to diagnose, often involving investigation and resubmission fees.

• “credit transfer”

• “SWIFT”

• “FedWire”

• Immediate exchange and acknowledgement of transfer

• Global coverage

• Reliable

• Expensive and inconsistent sending and receiving fees (e.g. lifting fees)

• Routing rules differ for every country

• Manual interface with bank

• Not designed for paying large volume of payees

• Limited traceability

• Generally poor access to bank transfer APIs

Requires bank account and ABA routing information, including IBAN, BIC, or other local banking account information.

Best Use Case for Wire Transfers

Wire transfers are best used with a payee who needs their money immediately or that is receiving a large amount of remittance. Because fees can range from $20 to $100, the amount of remittance should be a reasonable size.

Worst Use Case for Wire Transfers

Wire transfers should be avoided when the payee or beneficiary does not require funds immediately or when the transfer cost is a meaningful proportion of the payment amount.

HOW TIPALTI WORKS WITH WIRE TRANSFERS

When payees select wire transfers during the onboarding process as their chosen method of payment, Tipalti prompts payees to enter their bank account number and any other required information that local banking regulations require (based on their country).

Tipalti also checks form fields to ensure the entries have the correct character count, format, and structure as required by that country. This reduces virtually all likelihood that payments will be rejected due to incomplete or incorrect information. In addition, payees can choose to have their funds sent and deposited in one of the payer’s managed currencies (e.g. USD, GBP, etc.) or converted to local currency. Tipalti also offers the payee to choose certain payment thresholds so they can decide when a wire transfer is cost effective. Payers can also determine how much or if any fees are passed to the payee.

To streamline bank communications, Tipalti directs all payments at once through various payment method interfaces. The payer does not have to directly communicate with the bank or access any banking portals for remittance. Should issues arise (such as the wrong account information), Tipalti stops payment and interprets and normalizes wire transfer errors into standard, easy-to-understand error messages to make correction of the issue easy. If the payee can correct the condition, they are automatically sent a branded email on behalf of the payer with information for remedying the situation. To prevent overdraft, only adequately funded accounts will enable a transaction.


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