Wire transfers, also called bank transfers or credit transfers are the transfers of funds sent by one person or entity to another using computer-based technology and without human intervention.
Wire transfers provide a fast and reliable way to send money around the world, either using traditional banks or other Fintech alternatives like TransferWise for individuals or Kantox for businesses.
The main advantage of wire transfers is their immediacy. Wire transfers do not need the funds to be physically transferred from one bank to the other. There is only information the moves through a network such as SWIFT globally, or FedWire in the U.S, with the instructions defining the recipient’s identity, bank account (if applicable), amount, value date and the destination.
The receiving bank or institution makes the payment to the beneficiary and both institutions settle the payment in the back end afterwards.
Wire transfers are thus quick. Banking wires take one day on average while transfers with alternative services like Western Union or MoneyGram may take minutes.
Businesses processing significant amounts of daily wire transfers can improve process efficiency by integrating accounts payable automation solutions.