What is a wire transfer and how does it work?

When dealing with various global payment methods across countries and regions, your top priority is ensuring you transfer your funds securely and efficiently. One reliable option is bank transfer, such as wire transfer, which electronically sends money from one bank account to another. But what is a wire transfer and how does it work?

Read on to find out more about wire transfers and other bank transfer methods, their benefits, speed of payment, and costs to help you decide when a wire transfer works best as your preferred payment method. We’ll also share how Airwallex supports your business in achieving an agile global payments infrastructure.

What is a wire transfer?

A wire transfer is an electronic method used to transfer funds directly between financial institutions globally. It serves as a reliable bank transfer option for sending large amounts of money quickly and securely.

Understanding what is a wire transfer allows companies to execute high-value transactions safely. Senders must provide the recipient's name, account number, and banking details to initiate the process. The financial institution then transmits secure payment instructions to credit the designated account. However, traditional international wires can become costly due to intermediary bank handling fees.

What are the differences between wire transfer and bank transfer?

While investigating what is a wire transfer, it becomes clear that wire transfers are simply one specific type of bank transfer. A wire transfer stands out for its speed and security, making it ideal for urgent or high-value transactions. 

Wire transfers are usually faster with processing times as short as within the same day, but they come with higher fees and more stringent security requirements. In contrast, other forms of bank transfers, such as ACH in the US or SEPA in Europe, are generally used for routine and domestic payments. They are generally slower but much cheaper.

How does a wire transfer work?

Understanding what is a wire transfer requires looking at the digital communication happening behind the scenes between commercial banks. Here’s a step-by-step guide to understanding how wire transfers work:

• Provide details: The sender provides their bank with the recipient’s banking information. This information typically includes the recipient’s name, bank account number, bank branch, and SWIFT or IBAN code for international transfers.

• Verify identity: The sending bank verifies the sender’s identity and authorises the transaction. Fees may apply.

• Transmit payments: The sending bank transmits the payment instructions to the receiving bank through a secure system. Intermediate banks may also be involved at this stage.

• Deposit funds: The recipient’s bank receives the funds and credits them to the recipient’s account. The wire transfer process can typically take a few hours to a few business days.

What are the types of global wire transfers and bank transfers?

There are various types of transfers in banks, such as bank-to-bank transfers, online wire transfers, and cash office transfers, which vary depending on the region or country. For example, in the United States, the Fedwire and CHIPS systems are commonly used, whereas in Europe, SEPA transfers are prevalent.

Here, we’ve outlined the different examples of wire transfers and bank transfers globally, so you can choose the most appropriate method for your business needs, considering factors like speed, cost, and availability.

SWIFT (Society for Worldwide Interbank Financial Telecommunication)

SWIFT is the leading platform for international wire transfers, used by over 11,000 financial institutions in more than 200 countries. It provides a secure global messaging network for transmitting payment instructions. In its 2023 annual review, SWIFT reported handling over 11.9 billion secure FIN messages, with 89% of payments reaching recipient banks within an hour.

Key features of SWIFT:

• Extensive global reach, connecting banks worldwide

• Highly secure and reliable infrastructure

• Supports a wide range of currencies and transaction types

• Enables payments to countries not covered by regional payment systems

ACH (Automated Clearing House)

ACH transfers are electronic bank transfers processed through the Automated Clearing House network. It’s mostly used in the United States, and although ACH can also facilitate cross-border payments, its reach and speed may be more limited compared to SWIFT. According to Nacha, the value of ACH payments was US$22.1 trillion in the first quarter of 2025, a 6.6% increase from a year earlier.

Key features of ACH:

• Cost-effective, making them ideal for routine, high-volume transactions

• Domestic ACH transfers typically take 1–2 business days, while international ACH can take longer

• Secure and governed by strict regulations

SEPA (Single Euro Payments Area)

SEPA is the European Union's payment integration initiative for euro-denominated bank transfers. It provides seamless electronic euro-denominated credit transfers and direct debits across participating European countries. By mid-February 2024, SEPA credit transfer transactions totalled 42,569.72 million, and SEPA direct debits amounted to 21,635.42 million. In the Euro area, non-cash payments in the second half of 2022 increased by 8.8% to 65.9 billion, with the total value rising by 2.8% to €118.8 trillion.

Key features of SEPA:

• Enables fast, low-cost euro payments within the SEPA region*

• Standardised payment formats and processes

• Supports both individual and business transactions and is useful for businesses operating extensively in the Eurozone

*The SEPA region comprises the 27 European Union (EU) member states along with four non-EU countries (Iceland, Liechtenstein, Norway, and Switzerland) that have adopted the euro as their currency. These countries collectively form the SEPA zone where standardised euro payments can be sent and received.

FPS (Faster Payments Service)

FPS is a UK-based real-time electronic payment system that provides near-instant domestic money transfers between participating bank accounts. The system processed 5.09 billion transactions with a value of £4.2 trillion in 2024.

Key features of FPS

• Enables fast, secure, and convenient domestic payments in the U.K.

• Transactions are typically completed within seconds

• Supports various payment types, including single immediate payments and standing orders

How long does a wire transfer take?

Choosing a partner requires looking past standard definitions of what is a wire transfer and comparing actual market fees. The table below highlights the average time spent on a wire transfer by region or country.

How safe and secure are wire transfers?

High security is a major reason corporate entities look for what is a wire transfer solution during large acquisitions. The infrastructure relies on bank-level encryption protocols, including Transport Layer Security, to protect sensitive data.

Financial institutions implement mandatory Know Your Customer regulations to verify the identities of both senders and recipients. Furthermore, international regulatory bodies monitor network activity to prevent fraudulent interventions. Once an electronic wire transfer is finalised, the transaction is completely irreversible, protecting businesses from malicious chargeback disputes.

What are the benefits of wire transfers?

Wire transfers offer significant advantages to global eCommerce businesses due to their speed, security, and reliability in facilitating cross-border transactions.

The system offers a massive geographical reach, allowing businesses to transfer capital to overseas suppliers seamlessly. Because the network architecture uses direct ledger communication, payments are highly reliable. This gives purchasing managers peace of mind when executing critical supply chain transactions worth millions in foreign currencies.

Are wire transfers expensive?

Wire transfers often come with high costs due to hefty transfer fees and large markups on foreign currency exchanges. These expenses can add up quickly, especially for businesses that frequently do international transactions. 

Traditional banks add large markup margins to foreign exchange transactions, often hiding the real costs from business owners. This lack of pricing transparency hurts companies handling high volumes of cross-border trade. Administrative compliance reviews also increase overhead costs, making traditional money wiring an expensive habit for growing companies.

How much are domestic wire transfer fees?

• In the US, domestic wire transfer fees typically range from $25–$50 per transaction for businesses.

• In the UK, domestic wire transfer fees are around £15–£25 per transfer.

• In the EU, domestic SEPA wire transfers within the Eurozone typically cost around €0–€10 per transfer.

However, additional charges may apply if the beneficiary or corresponding bank charges them, impacting the amount you send and the recipient receives.

How much are international wire transfer fees?

International wire transfers are costlier, ranging from $20–$40 per transaction.

• In the UK, international wire transfer fees can be between £20–£40.

• In the EU, non-SEPA international wire transfers can cost up to £40.

Individuals and businesses also incur costs when they receive wire transfers, with fees ranging from $10 to $20 per transaction.

Poor foreign exchange rates

Bank wire transfers often offer less competitive foreign exchange rates due to traditional banking practices. That’s because traditional banks need to cover the operational costs of maintaining currency trading desks and complying with regulations, creating higher overhead costs.

Banks may also factor in a profit margin in their exchange rates to generate revenue from currency conversions. The lack of transparency in forex rate markups and competitive practices can result in less favourable rates for bank wire transfers compared to those offered by specialised financial service providers.

On average, bank exchange rates can have a markup of up to 3% to 6% above the mid-market rate. For example, if you’re paying a supplier in the UK €500,000, a 5% markup on the exchange rate could cost you an extra €25,000.

How to navigate costly wire transfer fees and rates

To mitigate the financial drawbacks of cross-border payments like those seen in wire transfers here, consider partnering with a modern payment provider that delivers competitive and transparent pricing. Certain providers have flexible foreign exchange (FX) solutions, giving businesses like yours greater control over how they obtain FX rates, execute transactions, and manage FX risk.

Crucially, access to real-time or locked-in competitive exchange rates can help eliminate inflated markups and ensure a more favourable currency conversion. This ultimately enables your business to save on transaction costs effectively.

What banks and FinTech providers deliver money wiring services?

There’s a wide range of banking and fintech providers to choose from when wiring money. In the table below, you’ll find a few global banks and fintech companies with a comparison of their wire transfer fees, exchange rates, and payout coverage.

Fees are current as of June 2026. For current fees, check our fee schedule.

Manage global payments and FX rates with Airwallex

Airwallex supports SWIFT for international payments. Businesses can use Airwallex’s SWIFT code – AIHKHKH1XXX – to send and receive funds globally. In addition, the platform is a powerful suite of payment solutions to help you manage currency risk and fees programmatically. Our global payment infrastructure allows you to pay partners, suppliers, and employees in 200+ countries and 90+ currencies at market-leading rates, with fast and reliable delivery.

Our features include:

Multi-currency accounts

• Manage funds in more than 20 currencies and make payments in the local currency of your suppliers and employees.

• Avoid unnecessary currency conversions and associated fees with like-for-like currency settlements.

Interbank FX rates

• Access market-leading foreign exchange rates, which are often better than those offered by traditional banks.

• Eliminate hidden fees and markups on currency conversions.

Fast international transfers

• Receive payments in as little as one business day.

• Avoid delays and late fees associated with slower bank transfers.

You can also simplify your workflows with batch transfers, customisable approval processes, and seamless accounting integrations.

Find out more about Airwallex's international money transfers.

Frequently asked questions

1. What’s the difference between a bank transfer and a wire transfer?

Bank transfers generally refer to any transfer of funds between banks, including ACH (Automated Clearing House) transfers, which are typically slower and used for smaller amounts. Wire transfers are a specific type of bank transfer known for their speed, reliability, and international coverage, often used for larger sums.

2. What do I need for a wire transfer?

To initiate a wire transfer, you will need:

• The recipient’s full name and address

• The recipient’s bank account number

• The recipient's bank name and branch

• SWIFT or IBAN code for international transfers

3. How can I send a wire transfer quickly?

To expedite a wire transfer:

• Ensure all recipient details are accurate

• Initiate the transfer before the bank's cut-off time

• Opt for transfers using a multi-currency global bank account

Sources:

Information was sourced as of June 2026 for reference purposes. For the latest details, please visit each provider’s official website.

1. https://www.hsbc.com.hk/zh-hk/ways-to-bank/internet/online-discount/

2. https://www.hsbc.com.hk/zh-hk/help/faq/transfers-and-payments/

3. https://www.hangseng.com/zh-hk/personal/banking/overseas-transfer-website/

4. https://www.hangseng.com/content/dam/wpb/hase/config/personal/servicecharges/pdfs/zh_HK/ortt_timetable.pdf

5. https://www.bochk.com/tc/more/ebanking/internet.html

6. https://www.bochk.com/tc/crossborder/remittance/faq.html

7. https://www.hkbea.com/pdf/sc/bank-charges/General%20Services%20SC.pdf

8. https://www.hkbea.com/html/tc/bea-personal-banking-outward-remittance.html

9. https://www.citibank.com.hk/chinese/banking/remittance.htm

Disclaimer: This article was prepared in June 2026 based on voluntary online research and publicly available information. We have not personally tested every tool or provider mentioned. This article is for educational purposes only, and readers should independently evaluate each service provider based on their specific business requirements. Content is updated every six months. To request an update, please contact us at [email protected].