Business Solutions

How Do Wire Payments Work?

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In this modern age, whenever you need to transfer money anytime and anywhere, a wire transfer can do the job for you. Wire payments are safe, reliable, and fast. The process of doing a wire transfer is relatively easy and convenient. If you still do not know how to make wire payments, here is a guide to help you out.

What is a wire payment?

Wire payments is a way to transfer your money electronically. Basically, the process goes like this: money from one bank will be transferred to another using an online settling facility called SWIFT or Fedwire. Wire payments allow individuals to send money across countries while maintaining security and efficiency. With this transaction, there is no physical money being transferred between financial institutions or banks.

What can you use wire payment for?

Wire payments are typically used to remit money from different places and usually used for business transactions. For example, you have a business selling bags with raw materials from Europe. Instead of mailing money, you can wire transfer and be paying suppliers in Europe from the comforts of your own home across the globe.

There are also several types of wire payments including:

  • Bank-to-Bank wire payments

The name already speaks for itself. A bank-to-bank wire transfer is merely a transfer of funds from one bank to another. This can be between accounts within the same banks, accounts in two different local banks, or accounts in two separate international banks.

  • Third-party wire payments

A third-party wire transfer is an electronic payment using a third-party money transfer service like PayPal or Western Union. This is done by coursing your money through a middleman such as PayPal to make the transfer to your recipient’s bank account. Their service includes making transfers using your credit card to your recipient’s bank account.

How fast are wire payments?

If you need to transfer money fast, wire payments can be the perfect tool for you since money is moved within one to two days. Better yet, if your wire payments are within the same country, it can be done within the day or even within minutes through same-day transfers. This simplifies the supplier payment process by miles. Unlike checks, you will not need to wait for funds to be cleared because money moves simultaneously. For entrepreneurs selling goods and services, wire payments can be safer than accepting a check since checks bounce.

How to make wire payments?

To send money, you will just need to open an account and follow the bank’s instructions for making a wire transfer. Typically, you will be asked to provide some information about the recipient’s bank account name, recipient’s bank account number, amount to be transferred, scheduled payment date, and bank code (only for international transfers). With advances in the banking industry, a majority of banks will no longer require you to submit a bank form for a wire transfer. Instead, you can simply just key in the details in your banking app and make the transfer.

On the other hand, to receive money, you will need to give your bank account details to the business or person sending money to you. Always double check to make sure you have the correct account numbers. Since money often gets moved in minutes, it may take a while for the funds to be credited back to your account if in case you make an incorrect transfer.

Sometimes, banks charge a fee for the transfer. Fees vary depending on the transaction and bank. So, you may want to check with your respective banks regarding the prices they charge for wire payments.

How safe are wire payments?

Wire payments are 100% secure as long as you do it with your bank or certified third-party payment channels.  However, the downside is that it cannot be canceled once the other is sent. So, make sure you have the correct details of the recipient if you are sending money and accurate information of your own account if you are receiving money. If ever you miss anything, you can call your bank to make the necessary arrangements to ratify the situation. However, it may take a few days to get your money back.

Conclusion

There you go, you have everything you need to know to make a wire payment. You are now ready to make wire payments. One of the best benefits of making wire payments is that no physical money has to move between one place to another, which mitigates a lot of risks. Wire payments are one of the quickest and most efficient ways to move money around to make payments anytime and anywhere.

 

 

 

 

 

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