Bank (wire) transfer is when money is sent from one bank account to another. The bank transfers a certain amount to the recipient for a certain fee and at the request of the sender.
The basis for the transfer is a payment order, which contains the details of the sender and recipient, the payer’s current account and the addressee.
Wire transfers by payment
Before executing the payment order, the sender’s bank checks the correctness of filling in the following details:
- name of the servicing bank;
- name of the beneficiary’s bank;
- bank identification numbers (BIN) of two financial organizations between which funds are transferred;
- full name of the sender’s organization or full name, if it is an individual;
- the current account from which money is transferred;
- TIN of the sender;
- the amount of funds transferred in figures and words;
- the content of the transaction, which should reflect the essence of the translation and comply with US legislation;
- full name of the recipient’s organization or full name, if it is an individual;
- the current account where the money is credited;
- TIN of the recipient.
If the sending bank reveals any errors in the payment order, then it has the right not to execute it. Employees of the credit institution are obliged to return the electronic document or paper payment to the client to eliminate inaccuracies in the details or the purpose of the payment.
Information about the transfer
The money is transferred to the recipient via wire transfer within 3 working days. You can return them only until the payment order receives the status “Executed”. It is possible to obtain information about whether funds have been credited to the account only from the recipient; banks provide such information only to account holders.
If the recipient has not received the money, you can request a bank check. To do this, you need a personal visit to your bank and submit an application indicating the payment number, date and amount of the transaction. This should be done no earlier than 3 days after the funds were sent since they may return to the sender’s account due to errors in filling out the payment order.
Money transfer systems
Currently, there are many payment systems available through which you can make a money transfer. They differ in speed, tariffs and transfer method. One of the most popular options is wire transfers via bank cards, which are called p2p transfers or card to card transfers.
Types of money transfers
Money transfers can be domestic – within one state, as well as cross-border – with sending money abroad. In the second case, you can transfer funds in foreign currency or with an exchange for local currency. For many developing countries, cross-border remittances are a significant source of income. International remittances usually fall into a separate category and are called remittances.
Purpose of money transfer
You can transfer funds as payment for goods, services, works. The destination is determined by the sender and the recipient. Sometimes the sender needs to provide the payment system operator with documentation confirming the purpose of the money transfer and its origin.
Participants of wire transfers
The participants in the money transfer are:
- Payment system operator – an intermediary in the form of the Central Bank of a country, a commercial bank, an international or national money transfer system, a non-bank organization (if there is a right to provide such services), as well as post office;
- Sender – an individual or legal entity;
- Recipient – an individual or legal entity.
Transfers of funds between different branches of the same bank are many times faster than interbank transfers. Correspondent accounts are not used for intrabank transfers. All transactions take place within one credit and financial institution.
The settlement between clients is even faster if the sender and the recipient are served in the same branch. In this case, funds are debited directly from the debit of the payer’s account and credited to the credit of the beneficiary’s account. The transaction is fixed instantly as soon as a bank specialist enters a payment order into the system or confirms an operation performed in the Client Bank, Internet Bank or mobile application.
Interstate wire transfers
For carrying out international wire transfers, the SWIFT system and other similar data transfer methods have been created. In fact, SWIFT does not transfer money but only transfers information about the transaction. The system supports one of the MT103 message types, which allows one banking institution to instruct another to transfer money between the accounts of clients of these banks. At the same time, the system itself controls the actions of all banks participating in the transfer, so that funds are debited and credited quickly and safely.
Not all cross-border transfer transactions follow a straight path. Often, an international transfer has a long chain of transitions between banks that have opened mutual correspondent accounts. The more banks participating in the transfer of funds, the more expensive a wire transfer is to the sender.
The procedure for transferring an international wire transfer is as follows:
- debiting the amount from the sender’s balance;
- crediting to the correspondent account of the sending bank;
- transfer between correspondent accounts of intermediary banks;
- crediting to the correspondent account of the receiving bank;
- crediting to the beneficiary’s account.
Such transfers between banks in different countries last up to 7 banking days. The SWIFT transfer system is also used for domestic transfers. With its help, settlements take place both between contractors, legal entities, and between individuals.
How long does a wire transfer take?
The time it takes to complete your payment and deliver your order depends on the banking system and the country where the transfer is made. Estimated terms:
- for simple wire transfers made at a bank branch, the payment receipt period takes from 3 to 7 working days;
- for electronic wire transfers made on the bank’s website, the payment receipt time is usually up to 2 business days. In rare cases, this can take up to 4 business days.