Definition
A wire transfer is an electronic payment sent individually from one bank to another, usually settling the same day for domestic transfers and within one to five business days internationally. Wires are fast and generally irreversible, which makes them common for large invoices, real estate, and international payments, but they cost more than ACH.
Also called: Bank wire, Wire, Telegraphic transfer, CHAPS
Wire transfer in practice
For a domestic US wire, the payer needs your bank name, wire routing number, and account number. For an international wire, they also need your bank's SWIFT code, and in many countries your IBAN, plus your bank's address.
Both banks usually charge a fee, and intermediary banks on international wires may take their own cut, so the amount received can be less than the invoice. State on the invoice who pays transfer fees, for example "All bank charges to be paid by the sender".
Because wires are hard to recover once sent, they are a favorite target for invoice fraud. Confirm any request to change bank details through a known phone number before sending or accepting changes.
Example
A US software firm invoices a German client 15,000 euros. The client sends an international wire using the firm's SWIFT code, and the payment arrives three business days later minus a 25 euro intermediary fee.
Frequently Asked Questions
Can a wire transfer be reversed?
Rarely. Once a wire is processed it is generally final. Banks can request a recall for fraud or error, but recovery depends on the receiving bank and is not guaranteed.
Who pays wire transfer fees?
By default each side pays its own bank's fees. You can ask the client to cover all charges, or add a line to the invoice for expected receiving fees, but agree on this upfront.
Related terms
- ACH transfer An ACH transfer is an electronic bank-to-bank payment in the United States sent through the Automated Clearing House network.
- SWIFT code A SWIFT code, also called a BIC (Bank Identifier Code), is an 8 or 11 character code that identifies a specific bank and branch for international wire transfers.
- IBAN An IBAN (International Bank Account Number) is a standardized account identifier of up to 34 characters, starting with a two-letter country code, used for cross-border bank transfers in Europe and many other regions.
- Routing number A routing number is the nine-digit code that identifies a US bank or credit union in domestic transfers.
- SEPA transfer A SEPA transfer is a euro bank payment made through the Single Euro Payments Area, which lets businesses and individuals in more than 30 European countries send euros to each other as easily and cheaply as domestic payments.
- Bacs payment A Bacs payment is an electronic bank transfer between UK accounts processed through the Bacs scheme, which takes three working days to clear.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.