What is Bank Wire Transfer
Wire transfer is a method of online money transfer from one person or institution (entity) to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office. Online money transfer systems are intended to provide more individualized transactions than bulk payment systems. Bank wire transfers are often the most expedient method for transferring funds between bank accounts.
A bank wire transfer is effected as follows:
The entity wishing to send money online approaches a bank and gives the bank the order to transfer a certain amount of money. The sending bank transmits a message, via a secure system, to the receiving bank, requesting that it effect payment according to the instructions given.
The message also includes settlement instructions. Either the banks involved must hold a reciprocal account with each other, or send money online to a bank with such an account, a correspondent bank for further benefit to the ultimate recipient.
Banks collect payment for the service from the sender as well as from the recipient. The sending bank typically collects a fee separate from the funds being transferred, while the receiving bank and intermediate banks through which the transfer travels deduct fees from the money being transferred so that the recipient receives less than what the sender sent. Each party in an online money transfer must be identified by the bank. It is hard to send money online anonymously, so it’s harder to pull off a scam with a bank wire transfer. In addition, if you send money online, payments are more certain - banks only do online money transfer if the sender has available funds, and it is difficult for the sender to pull the money back.
