How Do Wire Transfers Occur?
When you send money electronically to another person or financial institution, you conduct a wire transfer. Make these transfers in person, by phone or online through your local bank or other wire service provider.
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Identification
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Originally conducted through the telegraph or "wire," wire transfers now occur electronically through fiber-optic cables. Banks and wire companies use the Federal Reserve Wire Network, a federal communications network, or the Clearing House Interbank Payments System, a private network, to transmit financial amounts securely. They send messages regarding these transactions through the Society For Worldwide Interbank Financial Telecommunication (SWIFT) electronic message service.
Transferring Money
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To perform a wire transfer to a bank account, you need to provide the bank account information for your account and that of the recipient. The transfer occurs instantaneously, with the amount of money showing up in the target account either on the same or next day (longer for international transactions).
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Considerations
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When paying for online auction purchases or sending money to people you do not know, avoid using money transfer services, recommends Western Union. Use wire transfers to send money to friends and relatives who reside in other locations and need money quickly, but understand that wire transfer providers charge fees for this service.
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References
- Transact Money: "What Is a Wire Transfer And How Does It Work?"
- All Business: "Dictionary of Banking Terms"
- Western Union: "Protect Yourself from Fraud"
- Bank of America: "Frequently Asked Questions"
- Chase: "Wires: Frequently Asked Questions"
- Society For Worldwide Interbank Financial Telecommunication: Company Information
- Photo Credit money, money, money image by easaab from Fotolia.com
