What are wire transfers and how do they work?

Wire transfers are one of the most widely used ways to move money between bank accounts, especially when speed and security matter. Unlike checks or online wallets, wire transfers don’t require physical handling or third-party apps. Funds move electronically from one bank to another, often clearing the same day for domestic transfers and within a few days for international ones.

What is a wire transfer?

A wire transfer is an electronic payment method that transfers money directly from one bank account to another. Through wire transfers, people and businesses can transfer money between financial institutions both domestically and internationally. Not all financial institutions offer wire transfers, but most of the major banks in the U.S. do. You can also send wire transfers from credit unions, like Western Union.

Wire transfers work by sending electronic funds transfers between bank accounts using wire networks. There are different wire networks in different regions and worldwide. For instance, wire transfers in the United States are executed either through the US Federal Reserve Bank's Fedwire system or the Clearing House Interbank System (CHIPS).

Automated Clearing House or ACH transfers are also a form of bank-to-bank transfer, but they work on a different network. An organization called the National Clearing House Association (NACHA) governs the ACH network. ACH payments are limited to the United States and Puerto Rico, while wire transfers can be sent internationally, via the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.

Types of wire transfers

There are two types of wire transfers: domestic and international. The difference between the two comes down to the cost and the speed of the transfer. Domestic wire transfers are processed the same day and cost around $25–$35, while international wire transfers take one to five days to clear, and cost between $35–$50 on average.

International wire transfers take longer because they must move through the SWIFT network—a secure international bank network that allows financial institutions across the world to send and receive transfers of funds. The network also sets the compliance standards for banks and credit unions, reducing the risk of fraud.

Are there any transaction limits to wire transfers?

Wire transfers don’t have federally mandated limits, but banks and financial institutions often set their own based on risk policies, account type, and customer profile.

For personal accounts, limits can range widely. For example, Citi caps transfers up to $50,000 per account per business day. Whereas, Fidelity allows up to $100,000 per transfer, with a daily cap of $250,000.

Business accounts often have higher or adjustable limits, especially for companies that process large payments regularly. Some banks, like Chase, allow businesses to request customized limits based on transaction history and need.

Limits can also depend on the destination country. Transfers to high-risk regions may be restricted or flagged for additional review. Banks follow compliance frameworks like OFAC’s sanctions list to help manage international transfer risk.

In most cases, if you need to exceed your daily or per-transfer limit, you can request a temporary or permanent increase. However, this may involve manual approval or extra verification steps.

Are wire transfers safe?

Wire transfer services are encrypted to the highest standards and are very secure. North American banks and banks sending money to North America send international wire transfer messages using SWIFT's MT system. This messaging template lists the identities of everyone involved in the transfer, including the originating account number, beneficiary bank account, and intermediary bank details

The chances of funds reaching the wrong accounts are close to zero as long as the sender enters the recipient's information correctly. International wire transfers in the United States are regulated by the Office of Foreign Assets Control (OFAC).

OFAC creates lists of high and medium-risk jurisdictions and identities. Banks verify sender and recipient information against these lists before executing a transfer.

Banks can recall wire transfers in case of any errors. Given the high level of security during the process, chargebacks rarely occur. However, wire senders can experience fraud if they send money to be collected at a cashing office

For example, you can wire money to a recipient internationally using Western Union or other cash transfer services. The recipient, in this case, collects funds as cash at their local Western Union office. If you don't know the recipient, they might collect cash and refuse to provide services or goods.

In such cases, your chances of recovering funds are low. However, electronic wire transfers are very secure, and fraud rates are extremely low. Payment issues caused by network failure or bank mistakes are close to zero.‍

How to send a wire transfer

You can send wire transfers either on the phone or through your bank's online portal. This makes them an easy and accessible way to send remittances, whether they be bill payments or transfers between friends and family.

You’ll need the following information for a wire transfer:

• Recipient's full name
• Recipient's account number
• Recipient's bank's name
• Receiving bank's routing number or ABA/ BIC code (for US domestic transfers,) SWIFT code, or IBAN code (for international transfers)
• The dollar amount of money to transfer
• Reason for transfer
• Any additional instructions, optional

Most U.S. banks let you send a wire transfer in minutes through online banking or mobile apps. To begin, log in to your bank account and navigate to the section labeled “Wire Transfer,” “Transfers,” or “Send Money.” This option is usually found under your payments or transfers menu.

Next, enter the recipient’s bank details carefully. You’ll need their name, account number, bank name, and the appropriate routing, SWIFT, or IBAN code depending on whether it’s a domestic or international transfer.

Double-check all the information before proceeding. Incorrect recipient details are one of the most common reasons for wire transfer delays. Most banks also require two-factor authentication or a security PIN to complete the transaction. This extra step helps protect your account from unauthorized access.

After submitting the transfer, your bank will provide a confirmation message and a reference number. It’s important to save this reference number in case you need to track the transaction or resolve an issue later.

Wire transfers must be submitted before your bank’s daily cutoff time—usually between 2 p.m. and 5 p.m. local time—to be processed the same day. Transfers sent after this time are processed on the next business day.

If you are sending money internationally, your bank may ask for additional information and show the exchange rate before you confirm the transfer. Some banks allow you to lock in the rate at the time of sending.

Pros and cons of wire transfers

While wire transfers are fast and efficient, they’re not without risks. Unlike other payment methods, wire transfers are difficult to reverse, and verifying the recipient’s identity isn’t always straightforward.

Pros of wire transfers

• Secure: Wire transfers are a secure method of transferring large sums between businesses, reducing the risk of fraud compared to traditional methods like checks or cash.
• Fast transactions: Domestic wire transfers are typically completed within the same business day or within one to two business days, making them ideal for urgent payments.
• Streamlined process: Initiating a wire transfer is simple, often requiring just a few clicks within your banking platform, allowing businesses to move funds efficiently without involving multiple intermediaries.

Cons of wire transfers

• Risk of fraud: In B2B transactions, wire transfer fraud can occur, especially in cases of business email compromise (BEC) or other social engineering tactics. Once the transfer is made, it’s often irreversible, leaving businesses with limited options for recovery.
• Data entry errors: Accuracy is critical when entering account details like IBANs or account numbers. A small mistake can lead to incorrect transfers, causing delays or requiring lengthy investigations to resolve the issue.
• Lack of recipient verification: Since wire transfers don't typically involve a verification process, businesses risk sending funds to an incorrect or unverified recipient, especially when making advance payments for goods or services.

When are wire transfers the right choice for your business?

Wire transfers are the right choice for your business if it encounters the following situations regularly.

• You need to send large sums of money quickly. If you regularly send large sums of money, to your suppliers for example, and want funds credited quickly, wire transfers are your best option. Credit card payments are unsuitable for large transactions, while paper checks might sustain damage or take a long time to clear.
• You want to avoid lengthy withdrawal times. Wire transfer recipients do not have to wait for funds to clear. As a result, cash flow projection, via financial management software, becomes simple. You can instantly debit your accounts while recipients can credit funds on their books.
• You need to send money to international recipients. If your suppliers are based abroad, wire transfers are the easiest way of paying them. Electronic solutions like virtual cards are great for small sums, but if you regularly transfer large amounts of cash, wire transfers are a good choice since you won't have to worry about exhausting card credit limits.

Alternatives to wire transfers

Wire transfers are safe and reliable. However, if your business sends small amounts of money regularly, or wire transfer fees are too high, you can use one of the alternative service providers below.

Domestic transfers

• Zelle: Zelle works with almost every domestic bank account and credits cash to the recipient's bank account immediately. You can use Zelle even if your bank doesn't have a relationship with it.
• Venmo: Initiating petty cash transfers and paying miscellaneous expenses is easy with Venmo. Like Zelle, the service works with almost every bank account, and funds arrive instantly.

International transfers

• Payoneer: Payoneer offers multiple ways of paying and getting paid internationally. The service helps you send a payment link to your clients or send virtual bank account details denominated in the sender's local currency. For example, you can ask your EU clients to transfer money to a Euro-denominated account even if you're situated outside the EU. You can also transfer funds for free to another Payoneer account, making salary transfers and supplier payments easy.
• Wise: Previously called Transferwise, Wise is similar to Payoneer but doesn't offer as many virtual bank account options. Wise does charge the lowest fees, though.

Streamline your bill payments with Ramp

If your business regularly sends payments to international vendors, Ramp Bill Pay offers a faster, more flexible way to manage them.

With Ramp, you can send international transfers in either USD or local currencies—without leaving the platform. You can create, approve, and send payments in under 60 seconds, and Ramp automatically syncs everything with your accounting software.

Ramp supports international wires to a wide range of countries through the SWIFT network. For USD transfers, there’s a flat $20 fee. If you're paying in foreign currency, Ramp applies competitive exchange rates with full transparency before you send.

You can also add international vendor details directly within Ramp, including support for intermediary bank routing when needed. While most payments arrive within 1–5 business days, setup is fast and intuitive—no third-party tools required.