Wire Transfer Definition: What is a Wire Transfer?

We’ve paired this article with a comprehensive guide to global payment methods. Get your free copy of the Global Payment Method Guide!

We define a wire transfer, provide an overview of wire transfers, explain how to do a wire transfer, compare wire transfer vs. ACH bank transfer, and answer FAQs about wire transfers. 

What is a Wire Transfer?

A wire transfer is an electronic funds transfer made by financial institutions like banks, or money transmitters, from the sender to a receiver’s bank account. Wire transfers go through a system like SWIFT, the Federal Reserve Banks’ Fedwire Funds Service, or the Clearing House Interbank Payments System (CHIPS). 

Overview of Wire Transfers

Although wire transfer fees are expensive, wire transfers are safe to use domestically and internationally if the parties’ identification, bank and account information, physical address, and legitimate transaction purpose (excluding scams, money laundering, or terrorist organizations) can be verified. 

Types of Wire Transfers

Types of wire transfers include domestic and international. 


In the United States, domestic wires are less expensive and usually quicker to settle than international wire transfers. Networks for sending domestic U.S. wire transfers include the Fedwire Funds Service and Clearing House Interbank Payments System (CHIPS). 


International wire transfers (remittance transfers) are more complex than domestic wire transfers. In many developed countries with adequate banking systems, international wire transfers can be completed in one to three or five business days for the receiving bank to get the funds. 

Most international wire transfers go through the SWIFT network as SWIFT payments, using a SWIFT code, also known as a BIC (Bank Identifier Code). SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. Some countries, like European Union (EU) members, used the IBAN code for wire transfers to identify international bank accounts. 

Risks of Using a Wire Transfer

Once a wire transfer is sent, the sender may be unable to get their money back. Wire transfers can’t be canceled after being sent. And scammers like to use wire transfers. These scammers could pull con schemes or commandeer a bank account to send wire transfers without the owner’s knowledge or permission. 

To somewhat mitigate risks of transactions to wire money (and for other types of payments), U.S. financial institutions have security policies, including Know Your Customer (KYC) and screening against blacklists like OFAC (Office of Foreign Assets Control) maintained by the U.S. Department of Treasury. 

Benefits of Wire Transfers

Benefits of wire transfers include:

  • Speed
  • Network security
  • Large wire transfer amounts possible
  • Easy currency exchange

Benefits of wire transfers include the speed of receipt of wire transfer funds vs. sending checks and sending/receiving network security. For large money transfers, wire transfer limits may be higher than other payment types, making them ideal for significant business and real estate transactions. 

How Does a Wire Transfer Work?

A wire transfer, which is a type of electronic transfer of funds between financial institutions, works as follows:

  1. The sender’s bank gets information on the wire amount, the sender’s and recipient’s information, including legal name, physical address, contact information, country, bank, branch, routing, SWIFT, or BIC code, bank account number, or IBAN for wire transfers, and reason for the transaction. 
  2. The sender pays the amount of the wire transfer to their bank before the wire transfer is sent to the recipient, using money from a bank account type that is a checking account, savings account, or money market account.
  3. The sender’s bank provides wire instructions through a secure wire transfer network for the wire transfer to the recipient’s bank (and any intermediary banks). Wire transfer networks include Fedwire or CHIPS for domestic wire transfer transactions and SWIFT for international wire transfer transactions. 
  4. The recipient’s bank account receives funds for the wire transfer amount from their own bank. 
  5. The receiving and sending banks settle the wire transfer transaction. 

Wire transfers can be made through online banking, in-person at a bank, through a mobile app, or through a money transmitter company online or at the money transfer company location.

Businesses can use their line of credit to pay for a wire transfer by sending the money needed for a wire transfer to their designated bank account. 

Power your entire partner payouts operations


Customer Satisfaction


Annual Transactions






Customer Retention

What Information is Needed to Make a Wire Transfer?

The information needed to make a wire transfer depends on whether it’s domestic or international. These transactions go through different wire transfer networks. 

Information For Domestic U.S. Wire Transfer 

In the U.S., for sending a domestic wire transfer from a financial institution, you’ll need the following information:

  • Name of sending and receiving financial institution
  • Applicable bank branch 
  • Name of the sender 
  • Name of the bank account holder for receiving funds (per a government-issued ID)
  • Phone numbers of sender and receiver
  • Physical address of the recipient
  • Bank routing number (ABA number) for wires
  • Bank account number of the recipient
  • Dollar amount of money for the wire transfer

The recipient may also be called the beneficiary and their bank account is referred to as a beneficiary account. 

Money transfer companies that offer wire transfer services may not need the recipient’s bank account number and require upfront payment with cash or a debit card. If credit cards are allowed, the fees are higher. 

Money transfer companies will issue a tracking number that can be furnished to the recipient. For money transmitter companies like Western Union or Moneygram, the recipient will need to present their ID to obtain the money at a bank branch or specific store location.

PayPal wire transfers can be sent by PayPal account holders, requiring an email address or phone number of the recipient instead of their bank account number.

Information For International Wire Transfer 

To send an international wire transfer from a financial institution, you’ll need the following information:

  • Name of sending and receiving financial institution
  • Applicable bank branch
  • Country of recipient
  • Name of the sender
  • Name of the bank account holder for receiving funds (recipient’s name)
  • Phone numbers of sender and receiver
  • Physical address of the recipient
  • SWIFT/BIC code or IBAN (international bank account number)
  • Amount of the wire transfer
  • Purpose of the transaction

What are the Differences in Wire vs ACH?

Although wire transfers (wire payments) and ACH bank transfers are both transfers to external bank accounts, comparing ACH vs. wire transfers reveals the key differences. 

Differences between ACH and Wire Transfer

Differences between ACH and wire transfer include:

  • ACH is U.S. domestic only; a wire transfer is domestic or international
  • Settlement speed for funds availability
  • Batch vs individual transactions
  • Cost in fees
  • Ability to cancel a transaction
  • Ability to reverse erroneous transactions
  • Transaction size limits

Domestic vs International

ACH can only be used for electronic bank transfers within the United States. Wire transfers can be sent globally, including domestic and international locations. Domestic banks and credit unions in the U.S. are Nacha Direct Members authorized to use the Automated Clearing House. 

Funds Availability

Wire transfers have funds available when they reach the payee’s receiving bank account. ACH transactions must still clear the ACH network to become available. 

Batch vs. Individual Transactions

ACH transactions are batched, whereas wire transfers are individual transactions.


ACH transactions may be free at some banks. Pricing for both ACH and wire transfers is determined by each bank or money transmitter. Wire transfer fees are always higher than ACH fees. The cost for wire transfers includes outgoing wire transfer fees, incoming wire transfer fees, intermediary bank fees, and other costs. 

Cancellation and Reversal

Wire transfers are final, with no ability to cancel once the funds are sent, even if they go to a fraudster or the wrong account. An ACH bank transfer can be canceled and may be reversed for errors. 

Transaction Size Limits

Wire transfers may be made for large amounts, especially when using banks rather than money transfer companies. Effective March 2022, a Nacha rule change increases Same Day ACH per-transaction size from $100,000 to $1,000,000. The million dollars Same Day ACH limit is still too small for M&A deals or some other types of business transactions. 

Deeper-dive on ACH

ACH bank account to bank account electronic transfer goes through the Automated Clearing House ACH operators, as bank transfers made domestically in the U.S. between banks or credit unions that are Nacha members subject to Nacha rules compliance. The two ACH operators in the United States are the Federal Reserve Banks and Electronic Payments Network (EPN). 

ACH, one ePayments type, which can be debit or credit, is used within the U.S. for electronic bank transfer payments by an originating bank sender acting for the payer and a receiving bank for the payee. ACH payments may be authorized as recurring electronic payments from a bank account. ACH can also be used for direct deposit of payroll to employee bank accounts. 

The term global ACH can be used to describe global bank-to-bank transfers going through networks similar to the Automated Clearing House when these payments are made internationally rather than for two-sided transactions within the U.S. 


The following FAQs address and answer common questions about wire transfers. 

How Long Does a Wire Transfer Take?

A wire transfer can be completed domestically within 24 hours. An international wire transfer generally takes between one and three to five business days (not including bank holidays or weekends). Intermediary banks, errors, and other snags, including regulatory, can delay the process. Some countries are slow-to-pay, according to Bank of America. 

What Fees Are Associated with Wire Transfers? 

Wire transfer fees include fees charged to the sender, intermediary bank fees for international wire transfers, receiving bank fees, lost wire transfer investigation fees, wrong account reversal fees, foreign currency conversion fees at varying exchange rates for any wire transfer not paid in U.S. dollars, and miscellaneous fees. 

Are Wire Transfers Safe?

Wire transfers are safe if sent by a legitimate sender to a legitimate receiver, using the correct bank and account details. 

When Should You Use a Wire Transfer?

Use a wire transfer when you can justify the cost of a wire transfer, need to transfer a large amount, decide that it’s the best way to transfer money for a particular purpose, know or verify the receiving party’s legitimacy, and believe the wire transfer can be received within the time requirements. 

For example, the significant amount of proceeds from a real estate transaction or a business M&A transaction may justify using a bank wire transfer because of its cost and size. 

About the Author

  • Linkedin