What is a Wire Transfer and How Does It Work?

In this article, we cover what a wire transfer is, how they work, if they are safe and the fees involved.

What is a wire transfer?

Put simply, a wire transfer is an transfer of money electronically.

These days, that applies to just about every payment but to be precise, this term refers to a very specific method payment. It's a reasonably quick and secure transfer of funds from one bank or credit union to another financial institution using an electronic network such as Fedwire or SWIFT. Traditionally, wire transfers are fast. If a payment takes several days to clear as available funds in the recipient’s account, it is not technically a wire transfer.

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How safe is a wire transfer?

Basically, when funds go from one bank to another, and then straight to the recipient’s account, the process is secure and safe. Within Australia, each person involved in a wire transfer must have a bank account. That means they must have satisfied identification criteria as part of the process of opening that bank account.

Banking anonymously is virtually impossible in Australia – and most other countries – so that means that it is very difficult for thieves to conduct a scam involving wire transfer of funds. Of course, scammers do have inventive ways to get around security and they can still happen.

The primary risk around wire transfers could be if your money is intercepted and wired to a different account and then you don’t realise it’s gone into another account until it’s too late.

If somebody from overseas asks you to wire funds to their account, it’s very important that you do your due diligence and think very carefully about where you are sending it and how much you know about the person providing the details.

 

Avoid risky transactions

Some wire transfer transactions are particularly risky and these should be avoided. Wiring money to any office that pays its money out in cash, for example (known as a retail money transfer and done through places such as Western Union), can be impossibly difficult to trace back to any real person. Especially when you consider that fake identification could be used by the person collecting the cash.

Global transfers

How it works

Talk to your bank or financial institution. You’ll be asked to supply specific information about the bank account of the intended recipient and you usually have to use a special form that is supplied by your bank.

Information that is required every time:

1. SWIFT code of the bank you are sending the money to.

2. The name of the bank.

3. An Account name.

4. An Account number.

 

Other information you may need:

  • The address of the bank you are sending the money to.
  • The address of the person or company you are sending the money to.

Although some banks do let you do this online, others still require physical signing on a paper form. There is a fee associated with wire transfers and this differs from bank to bank.

Receiving a Wire Transfer

First, you need to supply your correct bank account details to the person or business who needs to send you the funds.

Asking your bank for instructions to do with incoming wire transfers will ensure that you are given the correct details to give to the sender.

Some banks charge a small fee to receive funds through wire transfer, while others do not charge at all.

Receiving wire payments is a much safer proposition because money is only wired out to a different bank account if the funds are actually available in the sender’s account.

Once the money lands in your account, it is usually processed as available funds within one business day. Although, there may be some exceptions between financial institutions. Cancelling the wire transfer and recalling the money from the account it has already landed in is virtually impossible for the sender to do.

It’s important to note that some electronic payments can be reversed, and crooks can take advantage of your confusion around this. If money was promised to be sent to you by wire transfer and then reversed, it is more likely that the money was sent via another electronic method so asking for a receipt of the wire transfer is one way to safeguard against this scam happening.

How long a bank wire transfer takes

Because genuine wire transfers are very fast, cleared funds are available almost immediately. Wire transfers can also be easily tracked – giving you added peace of mind. If you are sending money overseas, it can take between 1 and 5 business days. Click here for more information.

The costs to wire money

Each Australian bank will charge a different fee for a bank wire. Please note that a bank wire fee is paid by the person sending the money. The bank that receives the money on the other end may charge the recipient as well.

Commonwealth Bank charges $12 for an international wire transfer done online and $30 via a branch.

ANZ Bank charges $18 for an international wire transfer done online and $32 via a branch.

National Australia Bank (NAB) charges $22 for an international wire transfer done online and $30 via a branch.

Westpac Bank charges $22 for an international wire transfer done online and $30 via a branch.

 

Other electronic transfers

Although the term wire transfer is widely used to describe a variety of electronic funds transfers, this isn't the case. Wire transfer refers to one very specific type of transfer.

Compare wire transfer exchange rates and fees

The best deal for you

TransferwiseRead ReviewTotal (AUD)$18,303.80Exchange Rate1.8369Transfer Fees£35.28Transfer Time1-2 DaysLearn MoreTotal (AUD)$18,303.80Rate Updated less than 4 mins ago
So, sending 10,000 GBP to Australia comes to $18,303.80 including £35.28 in fees
GO TO SITE
So, sending 10,000 GBP to Australia comes to $18,303.80 including £35.28 in fees

About TransferWise

Transparency and an easy online experience are the 2 things that set TransferWise apart from the banks and other money transfer companies. If you prefer to bank online, you'll like TransferWise. Setting up an account and making a transfer is very easy. They are also very clear on the exchange rate and fees you'll pay before you make a transfer. Click here for the full review

Pros

  • Clear and transparent exchange rates fees
  • The online experience is first class
  • Like the banks, they are regulated by ASIC and registered with AFSL
  • Constantly bringing out new innovative products

Cons

  • There are currently a number of global currencies they do not currently support
  • Limited support based in Australia
  • Percentage based fee can add up on very large transfers

More trusted money transfer options

Provider Exchange Rate Transfer Fees Transfer TimeTotal (AUD) Rate Updated less than 4 mins ago
TorFXRead ReviewTotal (AUD)$18,285.94$17.86 more expensive Exchange Rate1.8286 Transfer Fees£0.00 Transfer Time2-3 DaysGet discounted rate $18,285.94$17.86 more expensive GO TO SITE
So, sending 10,000 GBP to Australia comes to $18,285.94 with no fees.

About TorFX

TorFX are particularly good taking care of customers over the phone but using their website isn't the easiest to use. They don't charge a flat fee which is great but it's important to consider their exchange rates. While, they don't offer fantastic rates for small amounts under $2000 , TorFX offer exceptionally good exchange rates for larger transfers to the UK, New Zealand, South Africa and Europe.

Pros

  • No transfer fees
  • Highly competitive exchange rates
  • Secure transfers with authorised
  • Assigned account manager
  • 24 / 7 Assistance
  • Available range of transfer options

Cons

  • Limited exotic currencies available
  • Exchange rates on small transfers aren't great
  • Website experience could be better
XERead ReviewTotal (AUD)$18,262.06$41.74 more expensive Exchange Rate1.8262 Transfer Fees£0.00 Transfer Time2-3 DaysGet discounted rate $18,262.06$41.74 more expensive GO TO SITE
So, sending 10,000 GBP to Australia comes to $18,262.06 with no fees.

About XE

XE is a well known and trusted name in the money transfer industry. With over twenty years experience, they now help 33,000 people and 2,000 businesses make transfers each year. Over 60 currencies can be transferred with XE and they pride themselves on the free tools and transparent rates they offer. Click here to read the full review

Pros

  • Well known and trusted brand.
  • Very informative website. Extensive information on currency and money transfers.
  • XE App is available on both iOS and Android. It allows you to see the interbank rate for over 100 currencies.
  • XE themselves charge no fees for international money transfers.
  • Offers support for both individuals and businesses when it comes to international money transfers.

Cons

  • Cannot pay via cash or cheque. Must pay via bank transfer, BPay is also accepted in Australia.
  • Maximum transfer amount is $500,000USD.
  • While XE compares more than 100 currencies, there are only 60 that are available for money transfers.
WorldFirstRead ReviewTotal (AUD)$18,258.39$45.41 more expensive Exchange Rate1.8258 Transfer Fees£0.00 Transfer Time2-3 DaysGet discounted rate $18,258.39$45.41 more expensive GO TO SITE
So, sending 10,000 GBP to Australia comes to $18,258.39 with no fees.

About World First

World First was founded in 2004 in the UK and has grown rapidly with offices now in the U.S., Canada and throughout Asia. They consistently receive strong customer reviews and in a recent study, 98% of their clients said they would use them again.World First have a strong online offering, particular for businesses selling online. They do provide local support as well with offices in Sydney. Click here to read the full review

Pros

  • No fees and great exchange rates
  • Safe and secure transfers
  • Regulated by ASIC and registered with AFSL
  • Great for personal and business payments

Cons

  • Does not accept BPAY, credit card, cheque or cash
  • Limited currencies available
WorldRemitRead ReviewTotal (AUD)$18,230.40$73.40 more expensive Exchange Rate1.8232 Transfer Fees£0.99 Transfer Time1-2 DaysGet discounted rate $18,230.40$73.40 more expensive GO TO SITE
So, sending 10,000 GBP to Australia comes to $18,230.40 including £0.99 in fees

About WorldRemit

WorldRemit are particularly good for transfers under $10,000 to destinations across Asia, Africa and South America. Sending money online is significantly easier than using companies like Western Union or Moneygram and their exchange rates and fees are clear and transparent. With 2 million users, WorldRemit has a focus on improving access to remittances for the billions people worldwide who don’t have access to banking. Because of this, WorldRemit has a number of ways to both make and receive transfers. They concentrate on servicing individual needs as opposed to businesses. Click here for the full review

Pros

  • They have a great network in Asia and Africa and number of receiving options like cash-pick up or bank transfer.
  • They are clear about their exchange rates and fees
  • No minimum amount

Cons

  • Maximum transfer sizes for every transfer
  • No support for business customers
  • They are not licensed to provide financial advice.
OFXRead ReviewTotal (AUD)$18,133.30$170.50 more expensive Exchange Rate1.8146 Transfer Fees£7.00 Transfer Time1-3 DaysGet discounted rate $18,133.30$170.50 more expensive GO TO SITE
So, sending 10,000 GBP to Australia comes to $18,133.30 including £7.00 in fees

About OFX

OFX (formally known as Ozforex) is the largest Australian owned money transfer company. It launched in 1998 and grew rapidly until finally listing on the Australian Stock Exchange in 2013. OFX excels in 2 areas – Online experience and customer service. The company was born online and continues to develop easy, intuitive products. While OFX customers do most of their transactions online, they are backed up with exceptional customer service.

Pros

  • Better exchange rates compared to banks
  • Highly safe and secure transfers
  • 1 - 2 days delivery times for most countries
  • Quick response time
  • Fantastic customer service

Cons

  • Credit cards, cheques and cash are not accepted
  • Transfers to Thailand can take up to 4 days
  • Fees for transfers smaller transfers
Take into account that we have not compared absolutely every bank and company in Australia. We compare the large, safe and reputable banks and foreign exchange companies that we have already researched, tested and approved. We also may receive a referral fee if you choose one of these banks or companies, but that wont affect the exchange rates or fees you get.