What is a wire transfer?
A wire transfer is a bank-to-bank payment method that moves funds electronically through specialized networks, settling within hours for domestic transfers or one to five business days for international transfers.
Unlike ACH transfers that process payments in batches, wire transfers move money individually through dedicated infrastructure. For domestic US transfers, banks use Fedwire, operated by the Federal Reserve. For international transfers, banks use SWIFT (Society for Worldwide Interbank Financial Telecommunication), which routes payments through correspondent banking networks.
How do wire transfers work?
When you initiate a wire transfer, your bank debits your account and sends payment instructions through the wire network. For domestic Fedwire transfers, funds move directly between banks through the Federal Reserve system. For international SWIFT transfers, the payment routes through one or more correspondent banks that hold accounts with each other.
The process requires specific information:
- Recipient's full name and account number
- Recipient's bank name, address, and routing number (ABA for US, SWIFT code internationally)
- For international wires: IBAN (International Bank Account Number) in applicable countries
- Wire amount and currency
- Purpose of payment (required for compliance)
Wire transfer costs and speed
Wire transfer pricing and settlement times differ significantly between domestic and international transfers. Domestic wires moving through Fedwire settle the same business day, while international wires routing through correspondent banks can take up to five business days.
Domestic wire transfers:
- Cost: $15-$35 per outgoing transfer, $10-$20 per incoming transfer
- Speed: Same business day if initiated before bank cutoff time (typically 2-3pm local time)
- Settlement: Real-time gross settlement through Fedwire
International wire transfers:
- Cost: $35-$50 per outgoing transfer, plus intermediary bank fees of $10-$30, plus FX markup of 3-5%
- Speed: One to five business days depending on correspondent banking relationships
- Settlement: T+1 to T+5 depending on currency corridor and banking network
Wire transfers vs other payment rails
Wire transfers serve different use cases than ACH or real-time payment systems:
Wire transfers vs ACH: Wires settle in hours, ACH settles in one to two business days. Wires cost $15-$50, ACH costs $0-$5. Wires are irrevocable once sent, ACH allows returns. Use wires for urgent high-value payments like real estate closings or same-day vendor payments.
Wire transfers vs real-time payments: FedNow and RTP networks offer instant settlement at lower cost ($0.01-$0.045 per transaction) compared to wires. However, wire transfer limits are typically higher, with most banks supporting wires up to $1 million or more per transaction.
Wire transfers vs stablecoin payments: Stablecoin rails like USDC settle in seconds at 1-2% total cost compared to wire transfers at 3-7% for international corridors. For cross-border B2B payments, stablecoins eliminate correspondent banking delays while maintaining settlement finality.
When businesses use wire transfers
Common wire transfer use cases include:
- Real estate transactions: Down payments and closing costs require same-day irrevocable settlement
- International supplier payments: High-value B2B payments where speed justifies wire costs
- Emergency payments: Urgent payments when ACH timing doesn't work
- Large transactions: Payments exceeding ACH or RTP network limits ($1 million for RTP, $100,000 for ACH same-day)
