Wire Transfer

A wire transfer is an electronic payment that moves money from an account at one bank to an account at another, processed as a single instruction rather than as part of a batch. Wires are used for large or urgent payments, such as property purchases, business settlements, investment transactions and international transfers. They are usually credited the same day for domestic payments and are generally final once the receiving bank has the funds, which makes them fast and reliable but also attractive to fraudsters.

The term is most common in the United States, where it distinguishes wires from ACH payments, which are processed in batches. Elsewhere the same kind of payment may be called a bank transfer, telegraphic transfer or, in the UK, a CHAPS payment. International wires rely on the SWIFT network and correspondent banking.

The sender gives their bank the beneficiary's name, account number, the receiving bank's identifier and the amount. For domestic US wires the bank identifier is a routing transit number; for international wires it is usually a SWIFT BIC, and in many countries an IBAN is required for the account. The sending bank checks the instruction, debits the sender and screens the payment for sanctions and fraud.

For a domestic wire, the bank sends the payment through the national high-value system. In the United States, the Fedwire Funds Service, run by the Federal Reserve, settles each payment individually in central bank money, as a real-time gross settlement system. The UK's equivalent is CHAPS, and the euro area uses T2. Once settled, the receiving bank credits the beneficiary.

For an international wire transfer, the sending bank sends a payment message, traditionally an MT103 and increasingly its ISO 20022 equivalent, pacs.008. If the two banks have no direct relationship, the payment passes through one or more correspondent or intermediary banks, each of which may deduct a fee. Currency conversion usually happens at the sending or receiving end.

Banks charge fees for sending wires, and often for receiving them. International wires can involve several charges: the sending bank's fee, intermediary bank fees and the receiving bank's fee, plus a margin on the exchange rate. The sender chooses who pays through a charge code. Under the OUR option the sender pays all fees, under SHA each side pays its own bank's fees, and under BEN the beneficiary bears all charges, which are deducted from the amount received. Unexpected deductions are a common cause of disputes over short-paid invoices.

The industry has been moving wire messaging to ISO 20022, which carries richer, structured data about the parties and the purpose of payment. SWIFT began moving cross-border payment messages to ISO 20022 in 2023, with a coexistence period in which the older MT and new MX formats ran side by side, and the Federal Reserve migrated Fedwire to ISO 20022 in 2025. Richer data helps with sanctions screening and reconciliation. SWIFT gpi lets banks track international wires end to end using a unique reference, the UETR, and has made it much easier to see where a payment is held up.

In the United States, wholesale funds transfers are governed by Article 4A of the Uniform Commercial Code, which sets out when a payment order is accepted, when the beneficiary is paid and who bears losses from errors and unauthorised orders. Consumer international transfers are also covered by the remittance transfer rule under the Electronic Fund Transfer Act, which requires disclosures and gives limited cancellation and error rights. Under the Bank Secrecy Act, banks must keep records of funds transfers of 3,000 dollars or more and pass certain information along with the payment, a requirement echoed internationally by FATF Recommendation 16 and covered under wire transfer transparency.

Once a wire has been settled and credited, the sender generally cannot reverse it. Banks can ask the receiving bank to return funds sent in error, but return depends on the beneficiary's cooperation or a court order.

The speed and finality of wires make them a favoured target for fraud. In business email compromise, criminals impersonate a supplier, executive or lawyer and send fake instructions to redirect payments to accounts they control. Property buyers are targeted with fake closing instructions. Criminals then move funds onward quickly, often through mule accounts and abroad. Banks counter with call-back verification of new payee details, payee name checks, transaction monitoring and rapid recall procedures. Businesses are advised to confirm any change to bank details by phone using a known number before sending a wire.