Wire Transfers 101: How Do They Work, And The Pros And Cons Of Wiring

Wire Transfers 101: How Do They Work, And The Pros And Cons Of Wiring

Since the advent of the Internet, everything has been made more convenient and accessible. You can send messages to people halfway around the world in a matter of seconds, and the same convenience applies to sending money. International remittances and wire transfers are more efficient online, but it’s not when there’s flaws and problems. 

People who engage in various businesses may require cash as soon as possible in order to make ends meet. Whether you need to make global payments immediately or sending money for emergency purposes, a wire transfer may be the best option for you. Before considering sending your money or suggesting your client to use a wire transfer, here are some handy information you’ll need to know: 

What is a wire transfer?  

A wire transfer is a kind of electronic payment that enables people to send cash quickly and efficiently whether it’s be through banks or a non-bank provider like Western Union. Depending on the financial institution of your choice, it may require bank account numbers although most institutions don’t necessarily need them. For senders, they require the name of the recipient, the destination of said payment, and the amount of money needed (which you have to pay upfront), whereas recipients may need to bring a form of I.D. as well as a code which will be sent to them.  

There are two forms of wire transfers: 

  • Domestic transfers allow the client to send money to another within his or her country. These transfers utilize their own services and servers and they only charge minimal fee since they have transfer limits. 
  • International transfers allow the customer to send money from one country to another. These types of transfers charge more since they have to enroll third-party services to accommodate requests. The third-party service that includes bank wiring service may be needed since they are able to dispense thousands of dollars. 

Who can use a wire transfer?

Nearly everyone can use a wire transfer to send and receive money; provided that they are able to fulfill some of the requirements the financial institution has provided, especially for people asking for e transfer payday loans. While a bank account number isn’t necessary for domestic wiring, large businesses paying for overseas services may need one as some foreign banks require a tracking number. 

There may be people or companies prohibited from engaging in the services depending on their known records; because some companies are very particular about not assisting possible criminal or terrorist activities. Some companies also have limits on the amount per transaction, especially when it comes to foreign currencies. 

How long does it take to send money?   

The length of time it takes to send money via wire transfer actually depends on the service provider and the third-party service that they enroll. If you are sending money domestically then the order can be processed within the same day and even an hour. For users sending money overseas, it may take several days. 

However, a lot of online wire transfer services have been known to send money directly into your bank in just a few minutes. 

How to do a non-bank wire transfer?  

To send money via non-bank institutions, here are the general steps to follow: 

Step 1:

Visit your nearest location 

Step 2: 

Calculate your fees accordingly. Domestic fees require minimum amount of processing whereas international orders generally cost more. 

Step 3: 

Fill out the required information. This includes your bank account number, the recipient’s name and address, and the amount of cash to be sent. Some institutions may request more information so it’s best to be prepared by visiting their online site and reading their guidelines. 

Step 4: 

Keep the receipt and clarify with your provider how long it will take. Some institutions will provide you an update on whether your money has already been received by the client. 

What are the pros and cons of wire transfer? 

Wire transfer is convenient for parties involved, however it doesn’t come without its pros and cons.  

Here are some of the advantages and disadvantages of this service: 

Pros: 

  • They are fast, easy to process, and require minimal fees.

    This allows the sending party to save time, energy, and money when processing payments. 

  • Effective for short-term solutions.

    People who need cash right away can ask the sending party to wire in some amount. 

  • Less strict.

    Some institutions don’t require a bank account number (which means almost anyone can use them) 

  • They are generally safe.

    Once your money has been sent, you can’t exactly cancel it although some orders may be cancelled if they have yet to be processed and delivered. 

  • Ubiquitous.

    Several well-known companies have receiving stations that can be found in various commercial centers. 

Cons:   

  • Not scam proof.

    Certain people may be tricked into sending money to a scam artist. Some of which involves sending an email providing instructions on how to send the money. Before doing so, call up the recipient and verify the wiring instructions as hackers can extract sensitive information over the internet. 

Should you choose banks or non-financial companies?

It honestly depends on which works best for your current situation. If you are sending domestically and need to do so quickly, then a non-bank provider can process your request as soon as possible. For international orders, some situations may involve large amounts of cash which in this case may be fit for bank transfers since they have more secure means of verification. 

Conclusion 

When it comes to wiring money, there are certain factors you need to consider first. One is how urgent does the recipient need to get the money. Another, is the amount of money you need to send. Next is whether the transaction is domestic or international in nature; and last but not least,  involves the institution’s fees and speed in processing requests.  

Make sure that you read the reviews of the transfer service before putting in your credit card and bank information as some of these sites may be used for credit card fraud and other illegal activities. Other factors may come into play although this can generally be resolved through constant communication between the sender and the receiver.