International wire transfer: How-to guide

In the age of smartphones, international wire transfers belong in money museums.

In more than 60 countries, including many developing nations, it has become incredibly easy to send funds in real-time to someone else over the internet — knowing nothing more than their mobile phone number.

However, 24/7 fast payment systems, a technology that’s starting to work pretty well for small-value transfers in domestic situations, have no counterpart when money has to jump over national borders.

International wire transfers can offer the perfect solution for making one-off payments to another country.

There are a variety of reasons you may need to send money abroad. You might be wiring a one-off payment to a loved one in another country, making a deposit on a holiday home, or regularly transferring your pension due to a relocation.

What is an international wire transfer?

An international wire transfer is a service offered by almost every bank that lets you send money from your bank account to a recipient’s bank account elsewhere in the world.

You can normally create an international wire transfer through your online banking services, enter the details of the person who will receive the funds, then pay for your transfer. Your bank takes care of processing the transfer then routes it to the recipient who receives the funds in their account.

International wire transfers are normally made using an international standard known as SWIFT—Society for Worldwide Interbank Financial Transactions. SWIFT allows money to travel between banks on the SWIFT network. It gives every bank a unique identifier that you can use to ensure your transfer gets to the intended recipient. So far, so good.

How do you send international wire transfers?

If you’re sending a wire transfer internationally through your bank, you will need to instruct them where to send payment. You can provide the recipient’s details by visiting a branch, calling your bank, or filling out an online form. Fees will vary depending on the bank and the location of the recipient.

Wire transfers through non-bank transfer services tend to come with lower costs. It may also be more convenient to complete the process online rather than visiting your branch in person. You will need to create an account with the organization and wire money online or over the phone. Once you make the payment, the organization will forward it to the recipient’s account.

These services can also offer you more flexibility when it comes to choosing exchange rates. Options include transferring funds at the current exchange rate, which can be quicker and simpler but may cost more.

You can also choose a forward contract. This is ideal if you want today’s competitive exchange rates, but need to transfer funds at a later date, as you can lock in the current rates for up to 12 months.

You may also be able to opt for a limit order. Nominate your preferred exchange rate, and the transfer service will make your payment as soon as this rate is available. Limit orders can last up to 12 months but tend to come with high minimum transaction amounts.

The Best international wire transfer services

If you just want to know the fastest, easiest and cheapest ways to send money overseas, we recommend using a specialist money transfer service. They give you all the benefits of an international wire transfer—speed, safety, security, and convenience—without the high fees that banks will charge. Depending on how much you’re sending and where you’re sending the money, we recommend:

Remitly: A great choice for sending money to friends and family overseas

Wise (formerly TransferWise): One of the most popular currency exchange providers in the world with low, transparent fees, especially for smaller amounts but can also offer good fee discounts for large transfers.

WorldRemit: A great choice for sending amounts less than US$10,000, especially good for Asia, Africa, and South America

XE Money Transfers: A reliable service with no upfront fees

OFX: A specialist foreign exchange service with superb customer service

Are International wire transfers safe?

International wire transfers are normally very safe. Providing you have the right recipient details and you’re using established banks, your money should arrive safely at its destination. Once the money arrives in the recipient’s account, it is normally as “Cleared Funds.” This means the recipient should be able to access and use the funds immediately.

It’s rare for wire transfers to hit problems, but it does happen. If a hacker or thief gets access to the recipient’s account, they could potentially receive the funds then immediately withdraw them or send them elsewhere. If you’re wiring large amounts, it’s worth talking to the recipient to get extra security in place for the transfer and for the recipient to double-check no one else has access to their bank account.

When is a wire transfer not a wire transfer?

Generally, an international wire transfer refers to sending money directly between banks, but that’s not always the case. When someone asks you to wire them money, they may be referring to using a bank, or they may not mind how they get the money, so long as they have access to the funds. If that’s the case, you have a good alternative—specialist currency exchange providers.

These are businesses that focus on converting money between currencies and getting it to the recipient in a fast and safe way. Even better, these types of money transfer businesses often have much lower fees than the banks. We’ll get into that a little bit later.

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