What is Wire Transfer?

Understand what is wire transfer and how does it work.
Wire Transfer
3 min

A wire transfer, also known as a money transfer or telegraphic transfer, is an easy and secure way to transfer funds electronically from one location to another, such as across cities or countries. It eliminates the need to handle cash or a cheque.

In this article, we will discuss what wire transfers are, their types, how they work, and more.

Also read: PF transfer form

What is a wire transfer

A wire transfer involves moving funds electronically from one bank account to another. It differs from an electronic transfer, which involves moving money between accounts in the same financial organisation. Wire transfers are fast, reliable, and secure and are often used to send large amounts of money quickly and safely.

Key takeaways

  • Wire transfers are done electronically across a network of banks or transfer agencies globally.
  • The money is not moved physically; it is all done electronically.
  • Wire transfers are useful for paying large bills, sending money abroad, or transferring funds between different accounts.
  • You must pay for the transfer when it is sent by a remitting bank and provide the recipient's name and bank account number.
  • Most wire transfers can take one to five business days to process, depending on the type of transfer.

Understanding wire transfers

You can set up a wire transfer through your online banking system. However, some banks may ask you to visit the branch and hand over the details in person. The transfer begins once the information is documented. The initiating bank sends a message with payment instructions to the recipient's bank through a secure system, such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. When the recipient's banking institution receives the information, it deposits its reserve funds into the assigned account. After the transaction, both banks settle the payment at the back end.

Also read: How to transfer PF online using UAN

Types of wire transfers

There are two main types of wire transfers: domestic and international.

1. Domestic wire transfers

A domestic wire transfer is done between banks or institutions in the same country. Senders may need a code or the recipient's branch number to execute a transaction. These transactions are typically processed on the same day when initiated and received within a few hours.

Also read: How to transfer EPF online

2. International wire transfers

An international money transfer is initiated in one country and settled in another. Senders are required to initiate an international transfer even when sending money to an individual in another country with an account in the same bank. These wire transfers are typically delivered within 2 to 5 business days.

Risks associated with wire transfers

  1. Ensure you know the receiver and send money only to people you trust to steer clear of scammers.
  2. Choose a reputable bank or money transfer service that asks for valid identification of the sender and receiver.
  3. International wire transfers are monitored by the government to prevent suspicious/illegal activities, such as funding terrorism and money laundering.

Pros and cons of wire transfers


  • Rapid settlement, even across borders
  • Cannot be bounced or withheld due to inadequate funds


  • High bank fees make wires unaffordable for certain amounts
  • Banks may limit the number of maximum transfers
  • Alternative payment methods can be cheaper and faster than wire transfers

Other options for wire transfers

  1. Cheques and money orders: Physical cheques or money orders are affordable alternatives. However, mail can sometimes be lost or delayed in transit.
  2. Automated clearing house: If the money is not required immediately, payments can be sent through the National Automated Clearing House (NACH), a centralised system implemented by the National Payments Corporation of India. It serves as a resourceful feature that conducts digital transactions by processing large volumes of debit and credit transactions.
  3. Mobile apps and services: Peer-to-peer financial services, such as Google Pay, PhonePe, Paytm, and BHIM, provide a fast and convenient way to send money using a phone number or unique ID, with little or no fees.

How is a wire transfer done

  • The sender provides the recipient’s name, contact details, address, bank account details, and the receiving bank’s details. They also have to mention the amount and purpose of the transfer.
  • The bank initiates the transfer by sending a secure message to the recipient’s bank with the transfer instructions.
  • The recipient’s bank receives the message, verifies the details and deposits the money into their account.
  • The banks settle the transaction among themselves.

How safe are wire transfers

Wire transfers are quite safe provided you know the recipient. Moreover, banks have to verify the identity of their customers when they open an account. A legitimate service assesses the identity of both entities involved in a transaction to prevent illegal activities.

How long does a wire transfer take?

Domestic wire transfers generally take up to three days in India but can be much faster, especially if the sender and recipient use the same banking firm. International wire transfers often take up to five business days.


Wire transfer is an important tool for anyone who needs to send money quickly and securely, especially when it is in a different location. It also allows entities to transfer a large sum of money, whether domestic or international. However, there are fees involved and wire transfers may take some time to settle.

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