What is a wire transfer? How it works, fees, and speed

Key takeaways

• A wire transfer is a cross-border electronic payment completed through the SWIFT network. It can take several business days and may involve multiple fees.

• Hidden costs such as exchange rate markups and intermediary bank charges are easy to overlook alongside the basic transfer fee. Calculate the total cost before choosing a payment method.

• Airwallex offers foreign exchange close to the interbank rate, routes 94% of transfers through local rails, and delivers 93% of payments on the same day.

A wire transfer is an electronic funds transfer that commonly uses the SWIFT network for international payments. Businesses use it to settle large international trade payments, but the process can involve multiple intermediary banks. As a result, transfers may cost more and take longer than local bank payments, with typical processing times of one to five business days.

This guide explains what a wire transfer is, how the process works, what it costs, and how to identify hidden bank charges. It also covers alternatives that can help businesses manage cross-border payments more efficiently.

What is a wire transfer?

A wire transfer is also known as a telegraphic transfer (T/T) or electronic money transfer. It moves funds electronically between accounts at different banks, often across borders. International wire transfers commonly use the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network to send payment instructions between financial institutions. For cross-border payments, correspondent banks help route the funds to the recipient’s account.

Mail Transfer (M/T) and Demand Draft (D/D) are two other traditional international trade payment methods. With a Mail Transfer, the sending bank posts a transfer order to the receiving bank, which then notifies the recipient. A Demand Draft works differently: The sender gives the recipient a physical bank draft, which the recipient takes to a bank to collect the funds.

Of these three traditional methods, wire transfers are generally the most convenient and fastest. To send one, the sender supplies the receiving bank’s name, its unique SWIFT code, branch address, and account details. The transfer can then be routed globally, subject to the relevant bank checks and cut-off times. Wire transfers can involve several fees, which vary by bank and transaction size. Exchange rates are also based on each bank’s daily FX quotes, which may include a markup above the interbank rate.

How does a cross-border wire transfer work?

International trade often requires cross-border wire transfers. Banks rarely have direct connections with every financial institution worldwide, so they use the SWIFT network to route payment instructions. Correspondent banks then help deliver the funds to the local destination account.

A typical wire transfer follows this route:

Local bank → verify transfer details → SWIFT network → issue transfer order → correspondent bank → receiving bank confirms receipt

Basic steps for a wire transfer

1. Provide transfer instructions: The sender gives the local bank the recipient’s details, including their name, SWIFT code, account information, and the payment amount. The bank checks the account balance and authorises the request.

2. Send interbank instructions: The sending bank transmits payment instructions to the correspondent bank or receiving bank through the SWIFT network.

3. Transfer the funds: The sending bank deducts the payment amount and applicable fees, then routes the funds to the receiving bank.

4. Confirm receipt: The receiving bank confirms that it has received the funds and notifies the recipient.

Cross-border wire transfers can take several business days because they may involve intermediary banks, SWIFT messaging, time-zone differences, and bank cut-off times. Each participating bank may also charge its own fee.

How much does wire transfer cost? What are the cut-off times?

Wire transfer fees and processing times vary significantly between traditional banks. The table below outlines current online banking fees and cut-off times for key institutions.*

*Data updated as of September 2026. Information is for reference only; check official bank websites for the latest details.

#Actual processing times for Citibank Express Transfer depend on the overseas receiving bank’s operations.

Are there hidden fees in wire transfers?

In addition to the basic outward transfer fee, cross-border wire transfers may involve several other costs.

1. Correspondent bank fees

• Typical cost: HK$100 to HK$300

• Intermediary banks charge correspondent bank fees for helping route the payment. Under an OUR payment instruction, the sender pays this cost upfront. Under SHA or BEN arrangements, the intermediary deducts the fee from the transferred amount.

2. Cable charges

• Typical cost: HK$50 to HK$200 per message

• Some banks apply an additional cable charge when payment instructions need to pass through multiple SWIFT codes.

3. Amendment, cancellation, and enquiry fees

• Typical cost: HK$100 to HK$300 per request

• Banks may charge an additional fee when you update payment details, track a transfer, or recall a payment after issuing the instructions. The original outward transfer fee is rarely refunded.

Exchange rate markups: The biggest hidden wire transfer cost

Many businesses focus on the outward processing fee and overlook the exchange rate. In practice, the FX markup can be the largest hidden cost in a cross-border wire transfer. Banks typically add a margin to the interbank exchange rate when converting currencies.

When comparing international payment options, look at both the upfront fee and the exchange rate you will receive. The difference becomes especially significant when your business makes high-value corporate payments.

Understanding wire transfer fee structures

When you send a wire transfer, you need to choose who pays the processing fees. Banks typically offer the following options:

• SHA (shared): The sender pays the outward fee charged by their bank. The recipient pays correspondent bank and incoming bank charges.

• BEN (beneficiary): The recipient pays all domestic and international bank charges. The fees are deducted from the final amount they receive.

• OUR: The sender pays all domestic and overseas bank charges upfront.

• Full value to account: Some banks offer this option to help ensure that the full transfer amount reaches the destination bank. The recipient may still need to pay an incoming fee charged by their bank.

The right option depends on your commercial agreement with the recipient. If your contract requires the recipient to receive an exact amount, choose OUR or full value to account. If both parties agree to share the transaction costs, SHA is generally the most cost-effective arrangement.

What information do you need for a wire transfer?

To process a wire transfer, you will usually need:

• The sender’s full name, account number, payment currency, and transfer amount

• The receiving bank’s name, SWIFT code, and destination region

• The recipient’s full account name, account number, and registered address

• The selected fee payment option

Practical tips for completing a wire transfer form

Keep these points in mind when completing your wire transfer instructions.

• Use the recipient’s registered name: Make sure the recipient’s name matches the name registered with their bank. For a corporate entity, enter the official registered company name instead of a trading name or abbreviation.

• Check the SWIFT or BIC code: SWIFT codes, also called Bank Identifier Codes (BICs), identify individual financial institutions. Ask your payee for the code, or find it on the bank’s official website.

• Include regional routing codes: Some regions require a specific clearing code as well as an account number. Transfers to the US require an ABA Routing Number, transfers to the UK need a Sort Code, and European payments require an International Bank Account Number (IBAN). Confirm all the required regional codes with your recipient before starting the transfer.

• State the payment purpose clearly: Use a clear and specific payment purpose in your instructions, such as “goods payment”, “service fee”, or “investment capital” can help prevent unnecessary compliance flags and processing delays.

Comparing local wire transfer options: Traditional banks vs virtual banks vs money changers

Traditional banks, virtual banks, and money changers all provide international payment services. Their main differences include the following.

• Traditional banks: Traditional banks operate physical branches and offer face-to-face customer service. They have an established market reputation and support major global currencies.

• Virtual banks: Virtual banks operate fully online under local financial regulatory supervision. Without a physical branch network, they manage customer queries through web portals and mobile apps. Some virtual banks support a limited range of payment currencies, such as HKD, CNY, and USD, which can restrict complex cross-border trade operations.

• Money changers: Money changers often market competitive exchange rates and low upfront transfer fees. Reliability varies between providers. If you use a money changer, choose an established institution. Check that your receipt shows the official business name, transaction date, applied FX rate, and transfer amount. High-value transactions may also incur unexpected fees or take longer to process.

Ready to make international payments faster with Airwallex?

Traditional banks, virtual banks, and money changers each have different advantages and trade-offs. Airwallex, a one-stop financial and payment platform for global businesses, gives businesses another way to manage international payments.

Key benefits include:

• FX rates from the interbank rate +0.2%: Save on large international payments compared with standard bank exchange rate markups.

• 94% of transfers routed through local rails: Bypass SWIFT and intermediary bank networks across 120+ regions, helping reduce additional intermediary fees.

• 93% same-day arrival: Local payment rails support faster delivery than traditional international wire transfers.

• 90+ currencies across 200+ countries: Access major global currencies, including USD, GBP, CNY, EUR, JPY, and KRW.

• $0 account setup fee: Set up an account without a minimum transaction requirement, suitable for businesses of all sizes.

Traditional bank wire transfers vs Airwallex

Airwallex operates in Hong Kong under the supervision of the Customs and Excise Department as a licensed Money Service Operator (MSO Licence No. 16-09-01929). It has regulatory authorisations across major markets, including the US, UK, Australia, Canada, Malaysia, New Zealand, and Singapore. By combining institutional-grade security with modern financial technology, Airwallex provides a reliable alternative to traditional banks and money changers.

Open your Business Account for free today.

Frequently asked questions

1. How long does a wire transfer take?

Traditional bank wire transfers take one to five business days, which can slow down urgent business payments. Airwallex routes 94% of transactions through local payment rails, delivering 93% of transfers on the same day without hidden international processing fees.

2. What are the types of wire transfer?

International trade wire transfers generally follow Advance T/T or Deferred T/T terms. Advance T/T requires the buyer to send funds before shipment, while Deferred T/T allows payment after the goods ship. Businesses may choose the appropriate option based on their agreed contractual terms.

3. Can a wire transfer be cancelled?

Yes. The sender must pay a cancellation fee, and previously deducted transfer charges are generally non-refundable. If the funds have not left the sender’s account, the bank will return them promptly. If the payment instructions have already been transmitted, cancellation depends on approval from the receiving bank.

4. Why do international bank transfers take several days?

Cross-border bank wire transfers to destinations such as Singapore, the UK, and the US can pass through one to three correspondent banks. Different time zones and strict bank cut-off times can also slow settlement, making instant cross-border processing difficult for traditional banks.

5. Can I open an overseas bank account under the same name and transfer funds to it?

Yes. Many international banks operate global branch networks that offer overseas account opening. You can open an account under the same name overseas and transfer funds from your local bank account using cross-border wire services. Check the minimum balance requirements and account fees with your bank before opening an account.

Sources:

Information was sourced as of September 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 September 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].