What is a wire transfer? Fees, duration, and how to make one 2024
A wire transfer – which might also simply be called a bank transfer or a telegraphic transfer – is a way of moving money from one bank to another electronically. You’ll usually use a wire transfer if you’re sending a payment overseas, and they’re also very commonly used for high value payments as they’re fairly fast and secure.
However, there are a few downsides to sending bank wire transfers. Generally international transfers processed by a bank are sent through the SWIFT system which is safe and reliable but which may mean there are extra costs to pay, which can be tricky to see. Bank wires may also take a few days to arrive, although this depends on the destination.
Aside from banks there are also other ways to send money overseas, including third party providers like Wise or OFX. These companies are specialists in currency conversion and international money transfers, and may offer lower overall costs as we’ll see in this guide.
Wire transfer comparison
Before we move onto our guide to wire transfers, let’s get a quick overview of costs. You can choose to send a transfer with a bank, or with a third party provider. Third parties like Wise and OFX are not banks, but they’re specialists in moving money overseas quickly and securely.
In our example, we’ll imagine we are sending 5,000 AUD to someone in the US, to be received to their bank account in USD. Here are the costs – and the amount the recipient would get in the end – with Wise and OFX, compared to 3 major banks:
| Provider/bank | Transfer fee | Recipient gets: |
|---|---|---|
| Wise | 21.95 AUD | 3,233.49 USD |
| OFX | 15 AUD | 3,189.66 USD |
| NAB | 0 AUD | 3,165.91 USD |
| ANZ | 9 AUD | 3,139.34 USD |
| Commonwealth | 0 AUD | 3,117.60 USD |
*Data correct at time of research – 2nd December 2024
As you can see, in this example, the recipient gets more in the end with Wise. That’s even though Wise looks to be the most expensive on transfer fees. The key here is in the exchange rates used to convert your AUD to USD. While banks may add some fees into the exchange rate they use to convert your funds, Wise uses the mid-market exchange rate and splits out all of the costs for transparency. That makes it very easy to see what you’re paying with Wise – and in this case it means your recipient gets more in the end, too.
What is a wire transfer
A wire transfer, which may also simply be called a bank transfer, is a way of sending money from one bank to another. Wire transfers are processed through a network of banks, using secure messaging to pass over the details related to the transfer such as the amount, the currency and the bank account the funds are to be debited from, and credited to.
Wire transfers can be sent between banks, or through online providers such as Wise, OFX, or Remitly.
What are the types of wire transfer?
You can send money using a wire to a bank account in Australia – a domestic wire – or, you can send money to a bank account overseas using an international wire.
Domestic wires
Domestic wire payments are sent from a bank in Australia, to be received in another bank in Australia. Usually, these payments are sent and settled in AUD. To send a domestic wire payment you’ll need the recipient’s name, bank account number, bank name, and BSB. There are often limits on the amount you can send using a domestic wire, although you may be able to increase your limits on application to the bank if you need to.
International wires
International wires are sent from a bank in Australia, to be received in an account at a bank overseas. Usually these payments are sent in AUD but received in the local currency wherever you’re sending money to. To process an international wire you’ll normally need the recipient’s name, bank account number or IBAN, bank name, bank SWIFT code and any additional information based on the specific country you’re sending to. You’d need a sort code to send a payment to the UK for example.
Are wire transfers safe?
Wire transfers are a safe way to send money since they are secured by the transfer service providers which must follow strict guidelines and rules, and sent via a secure electronic network.
That said, it’s important to take normal common sense precautions when sending a wire payment to anyone at home or abroad. Criminals may try to exploit vulnerable people in many ways – including trying to use wire transfers to steal funds. Fraudsters may pose as someone you know and trust, and ask you to send them money, for example. Other common scams can include asking people to send money using a wire to unlock an inheritance or a financial prize for example.
You can learn about current scams fairly easily online – but if something seems strange or too good to be true, hold off sending any money over a wire until you’re sure. You can’t usually get your money back once the payment is processed.
Wire transfer fees
As we saw in the example payment earlier, the fees for an overseas transfer can include both an upfront transfer fee, and an exchange rate markup, known as a margin. On top of this, third party fees may be deducted as the payment is processed, and the recipient’s own bank might charge a fee when the money is deposited to the recipient account in the end.
All in all this can end up costing more than you might think. In addition to the transfer charges which are easy to spot, the exchange rate markup can be a significant amount, particularly for higher value payments. Bank exchange rate margins are often about 3%. Here’s how the exchange rate markup builds up with a 3% margin used for different transfer values:
- Sending 1,000 AUD – the exchange rate markup adds 30 AUD to the total
- Sending 5,000 AUD– the exchange rate markup adds 150 AUD to the total
- Sending 50,000 AUD – the exchange rate markup adds 1,500 AUD to the total
Checking both the transfer fee and the exchange rate offered by any bank or provider you may choose for an international money transfer is crucial, to avoid unexpected costs.
Here’s a reminder of the costs for some of the banks and providers we looked at earlier:
Wise: 21.95 AUD
OFX: 15 AUD + an exchange rate markup
ANZ: 9 AUD + an exchange rate markup
Advantages and Disadvantages of Wire Transfers
Sending money with a bank transfer or a wire transfer is usually easy to do, and can often be arranged securely online through your own bank or through a third party service. However, there are some drawbacks you’ll also want to consider. Here’s a summary of wire transfer pros and cons.
Wire transfers pros
✅ Secure, reliable and familiar
✅ Send with a bank or choose an alternative provider
✅ Transfers can be sent to bank accounts in more or less any country in the world
Wire transfer cons
❌ International transfers with banks may have fairly high overall costs
❌ Exchange rates may include a markup
❌ Transfer fees can be higher when sending money in person at a bank branch
Alternatives to wire transfers
Using an electronic method of sending money is certainly easier and more secure than mailing cash – but using your bank to send a wire might be quite costly if you’re sending money to an account overseas. Instead, you may decide to send your transfer with a third party specialist which offers digital payments in foreign currencies, such as Wise or OFX.
Providers like Wise or OFX have developed their own networks to process international payments which keeps down the costs, and can mean that transfers are very fast to arrive in the recipient account. You can register with a provider like Wise or OFX easily online or with your phone, and set up a transfer very quickly and easily. You’ll still be able to pay from your preferred bank account – or with a card – and the transfer is processed through the provider’s network as soon as you’ve paid. The process is simple, and providers have developed intuitive apps to let you arrange everything in just a few short steps.
How to send a wire transfer
The way you send a wire transfer will depend a lot on the provider or bank you decide to use. Generally banks allow you to send money online, in their app, by phone, or in a branch. However, the costs of the different payment methods may vary.
Sending money online or in an app is usually the cheapest and most convenient option. The process is designed to be easy to use. While it varies a bit depending on the specific bank or provider you’ve chosen, the steps are likely to look a bit like this:
- Log on to the provider or bank’s website or app
- Navigate to the payment area
- Choose where you’re sending to, and enter the amount to send
- Add the recipient’s details or select from your recipient list
- Fund the payment from your preferred account or with a card
- Check everything over and confirm the payment
What information do you need to make a wire transfer?
Usually you’ll need the following information to make a wire transfer:
- Your recipient’s name and address
- The name and address of the recipient’s bank
- Your recipient’s bank account number or IBAN
- Your recipient’s bank’s SWIFT/BIC code
For some countries a little additional information may also be required, such as a sort code for the UK.
How long does a wire transfer take?
When a wire transfer is processed through the SWIFT network it is passed from the sending bank to the recipient bank via one to three intermediaries. This can mean it takes a few days for payments to arrive.
Money transfer specialists which don’t usually use the SWIFT network have developed their own payment systems which can mean that money arrives more quickly.
Ultimately, though, the delivery time of any wire transfer arranged through a bank or other non-bank alternative service, will depend on the destination country, the value of the payment, and other factors.
Here’s how long transfers take with a few of the providers we looked at earlier:
Wise: Payments may arrive instantly, and most arrive in 24 hours*
OFX: 1 – 2 business days in most cases
Commbank: 3 business days in most cases
*The speed of transaction claims depends on individual circumstances and may not be available for all transactions
Wire transfer limits
Banks set their own maximum daily limits for wire transfers, which can often be quite low for digital transfers, with the option to increase your limits by calling the bank or visiting a branch. The limits do vary a lot between providers. You may find you can move an unlimited amount between accounts in your own name, for example, but you’re more restricted if sending money to someone else.
Non-bank providers are still likely to use limits for security, but they’re usually set very high to allow all customers, including business customers, to transact conveniently.
Can you cancel a wire transfer?
A wire transfer generally can’t be cancelled once it’s been processed. This is one reason that criminals may try to use wire transfers to get people to send them money. Once the transfer is initiated there’s very little chance of stopping it, and so all the victim can do is report the matter to their bank and to the police for follow up.
Conclusion
Sending money electronically makes a lot of sense, and is far easier and more secure than using cash for large payments. Sending money with your bank is usually possible and pretty convenient, but it may not be the cheapest or fastest option – particularly if you’re sending money to someone abroad.
Instead, international money transfer services can often offer lower overall costs and a convenient end to end service which gets your money where it needs to be quickly. Take a look at providers like Wise and OFX as a comparison to your bank the next time you need to send money, to see which is best in your own specific circumstances.
FAQs
What is a wire transfer?
A wire transfer – which may also be called a bank transfer – is a way of sending money from one bank account to another, electronically. You can send a wire transfer with a bank or with a non-bank service like Wise or OFX.
How long do wire transfers take?
How long a wire transfer takes can depend on where you’re sending money to and from. Some providers can process payments within a few minutes, but some payments may take a few days to arrive in the recipient account.
How to send a wire transfer?
Send a wire transfer with your bank or a non-bank specialist service. Banks usually let you send money online, in app, by phone or in a branch, while non-bank specialist providers tend to operate predominantly online and in app.
