What are wire transfers and how are they different to bank transfers?

Known for speed and efficiency, a wire transfer refers to the electronic transmission of funds from one person to another, typically facilitated by banks but also possible through specialised apps.

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

Considered as one of the ways to send money securely, the process involves a sender providing crucial information such as a recipient's bank details and an amount to be transferred.

Wire transfers differ from bank transfers, which usually involve moving money quickly within the UK through entities like the Bankers’ Automated Clearing Services (BACS) and the Faster Payments Service.¹

How to wire money easily

Wiring money is a convenient way to send funds to someone. Whether wiring through a bank or building society or using an app, here's a brief overview of the process:

• Create an account: Choose a reputable money transfer service or use your bank's mobile app.

• Add funds: Link your bank account or credit/debit card. Transfer money into the account by adding funds from the linked bank account or card.

• Gather recipient details: Obtain the necessary information, such as their full name, contact details, and bank account information.

• Initiate transfer: Double-check the recipient's details for accuracy to avoid any errors, and choose the funding source (e.g., linked bank account or card).

• Confirmation: Receive a confirmation message or email with transaction details. Track the progress of the transfer, which will show when the funds are sent and when they are received by the recipient.

Be aware of any fees associated to transfer money as these can vary depending on the service used.

Types of wire transfers

Wire transfers can be broadly categorised into two types: domestic and international.

Domestic wire transfers

Domestic wire transfers are generally used to send funds from one UK resident to another. These transfers can be fast, as they don't require currency exchange or cross-border regulations. They are ideal for quick, large-sum transactions within the UK.

International wire transfers

International wire transfers normally involve sending money internationally to the country where a recipient is based. These transfers can be made for personal or business purposes. However, they require additional steps such as determining the currency conversion rate and complying with international banking regulations. Learn more about how to send money internationally.

Potential advantages and disadvantages of wiring money

While wire transfers may be a popular choice for sending money, it’s important to assess the potential benefits and risks.

Potential advantages

• Efficiency: Wire transfers are often known for their speed.
• Security: Transfers are generally secure.
• Ease of international transactions: Wire transfers can simplify the process of sending and receiving money abroad.

Potential disadvantages

• Transfer limitations: There are often limits on the amount that can be sent through wire transfers. Limitations can vary depending on the institution and the type of transaction.
• Fees: Wire transfers can incur fees, which may be imposed on both a sender and receiver.
• Difficulty in recalling funds: Once a wire transfer is initiated, it can be challenging to recall the money if there is an error in the payment.

Sending money should always be easy, quick, and safe

Wire transfers are particularly useful to send money quickly and efficiently across borders. However, it’s important to consider the potential drawbacks like fees and transfer limitations. Learn more about how to transfer money online.