Wire transfers 101: Everything that businesses need to know


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  1. Introduction
  2. What is a wire transfer?
  3. How do wire transfers work?
  4. Wire transfers vs. ACH transfers
  5. International wire transfers
  6. How long do wire transfers take?
  7. Are wire transfers safe?
  8. Can wire transfers be reversed?
  9. Wire transfer fees
  10. Pros and cons of wire transfers for businesses
    1. Pros
    2. Cons

Wire transfers are a popular method of sending funds between two parties. 2021 saw more than 200 million wire transfers sent, an 11% increase compared to the previous year. When it comes to your business, should wire transfers be part of your strategy for sending and receiving money? Here’s what you need to know about how wire transfers work and their potential pros and cons for your business.

What's in this article?

  • What is a wire transfer?
  • How do wire transfers work?
  • Wire transfers vs. ACH transfers
  • International wire transfers
  • How long do wire transfers take?
  • Are wire transfers safe?
  • Can wire transfers be reversed?
  • Wire transfer fees
  • Pros and cons of wire transfers for businesses

What is a wire transfer?

A wire transfer is a way of moving funds electronically from one party to another, either directly, between two bank accounts, or from person to person, using a non-bank third-party wire transfer service, like MoneyGram or Western Union. Wire transfers are a fast, reliable, and secure way to move money domestically and internationally.

How do wire transfers work?

In conventional bank-to-bank wire transfers, funds are transmitted through wire networks. In the US, the Federal Reserve manages the network that banks use to send and receive funds via wire transfer: the Federal Reserve Wire Network (commonly known as Fedwire). The Fedwire is a real-time settlement system of central bank money used to electronically facilitate transactions between financial institutions. This network is used by businesses, consumers, banks, and government agencies to safely and quickly transfer funds.

The ease and speed of wire transfers make them a popular option, and the Fedwire fields a great deal of transfer traffic. In March 2022, individuals and businesses sent more than 18 million wire transfers, according to the Fedwire’s regular reporting.

Account holders can initiate wire transfers directly through their banking institution. In order to send a wire transfer, the sender must provide the following information:

  • Sender’s bank account number and ABA routing number
  • Recipient’s name
  • Recipient’s bank name
  • Recipient’s bank account number and ABA routing number
  • Recipient’s address
  • Amount of money to be sent

Since you can initiate wire transfers directly from your bank, which will only approve a transfer if the amount is covered by available funds, the recipient doesn’t have to wait for the transfer to be approved. In most cases, domestic wire transfers will leave your account on the same day that you request the transfer.

Wire transfers vs. ACH transfers

Wire transfers and ACH transfers are popular types of electronic funds transfers (EFTs) that are used to send and receive funds without the use of paper money, physical cheques, or credit cards. Both use a network that’s maintained by a third-party organisation to move money between accounts at different financial institutions. But wire transfers and ACH transfers are not interchangeable and in fact contain some key differences:

1. The network that they use
ACH transfers use the Automated Clearing House (ACH) to transmit funds between accounts. The ACH is a centralised US financial network through which banks and credit unions send and receive electronic payments and money transfers. It’s administered by the National Automated Clearing House Association (Nacha), an independent organisation owned by a large group of banks, credit unions, and payment-processing companies. Wire transfers, on the other hand, move through the Fedwire.

2. Transfer time
Wire transfers, which are settled in real time, can take anywhere from a few hours up to two business days to process and are generally considered the faster option. In comparison, ACH transfers typically take one to four business days. In March 2021, Nacha changed its operating rules to expand access to same-day ACH transactions, which allows for same-day settlement of many ACH transactions.

3. Cost
Wire transfers usually cost more than ACH transfers. Whereas ACH transfers are either free or cost just a few dollars, domestic wire transfers can cost up to $35, and international wire transfers can cost between $35 and $50.

4. Geography
ACH transfers are only available for use with US-based bank accounts. Wire transfers can be used for both domestic and international transfers.

ACH transfers
Wire transfers
National Automated Clearing House Association (NACHA) Federal Reserve Wire Network, also known as the Fedwire
1–4 days A few hours up to 2 days
Cost to send
Usually free, otherwise a few dollars Domestic: Up to $35 International: $35–$50

International wire transfers

International wire transfers are also known as "remittance transfers", a term for EFTs sent from someone in the US to a person or business in another country. International wire transfers are subject to federal protection. In October 2012, the Consumer Financial Protection Bureau adopted a set of rules to protect American consumers when they send money abroad. These regulations include the following provisions, all of which are aimed at reducing consumer risk:

  • Disclosures
    Financial institutions that send remittance transfers are required to disclose certain information to consumers before a transfer can be sent, including:

    • The exchange rate, which is the value of the original currency (in this case, US dollars) in the local currency of the country where the transfer will be sent
    • All fees, including fees from the bank (or other entity) that initiates the transfer, and those of receiving and intermediary agents abroad
    • The final amount of money that will be delivered, minus fees and taxes
  • Receipt
    After initiating the wire transfer, the sender must receive a receipt that includes the following information:

    • When the funds are expected to arrive at their destination
    • Cancellation window during which the sender can cancel the transaction (usually 30 minutes)
    • Steps that the sender can take to cancel the transaction
    • How to submit complaints and other feedback related to the transfer

The rules also mandate how the sender’s agent (usually their bank or third-party wire transfer company) must deliver the aforementioned items. They must give the sender the disclosures before sending the transfer and the itemised receipt after the transfer has been completed.

How long do wire transfers take?

Wire transfers owe much of their popularity to their speed. Domestic wire transfers are typically processed and delivered within one business day, although if the transfer is initiated late in the day on a Friday, it’s possible that the funds won’t be delivered until the following Monday (or the next business day, if Monday is a public holiday).

International wire transfers originating in the US usually take one to five business days to reach their destination. The extra processing time can, in part, be attributed to additional security requirements aimed at decreasing the risk of fraud and money laundering that comes with international bank transfers. Additionally, these transfers frequently involve currency conversions, which adds to the processing time.

Are wire transfers safe?

Wire transfers are widely considered a safe way to move money between bank accounts, as long as you know the party that you’re sending funds to. Institutions that provide wire transfer services are bound by a set of strict rules and regulations, and the wire network itself is generally considered secure, although it’s certainly not immune to attempts by hackers.

Can wire transfers be reversed?

Usually, wire transfers cannot be reversed once they’ve been sent. International wire transfers can sometimes be cancelled within 30 minutes of initiation, provided that the funds haven’t already been processed and deposited.

Wire transfer fees

Compared to other methods of moving funds, wire transfers are relatively expensive. The cost varies depending on a few factors:

  • Where the transfer is initiated
  • Where the funds are being sent
  • Whether you’re the sender or receiver

Different financial institutions charge different amounts to initiate wire transfers, but most cost a flat fee of $25 to send money to another person in the US and $35 – $50 to send money internationally. Depending on their bank, the recipient of a wire transfer might need to pay a fee of $10 – $20 to receive the funds. Here’s more information about what some of the major US banks charge for incoming wire transfers.

Stripe charges users a fee to receive wire transfer payments.

Pros and cons of wire transfers for businesses

Are wire transfers the right choice for your business? Consider these pros and cons:


  • Fast
    While wire transfers aren’t as speedy as card payments, they remain one of the fastest ways to transfer funds electronically.

  • Secure
    Wire transfers are a secure way to move funds between parties.

  • Reliable
    When you send or receive a wire transfer, you can count on the funds appearing when and where they’re supposed to. Unless the sender inputs the recipient’s account information incorrectly, wire transfers leave little opportunity for error.


  • Hard to cancel
    Because wire transfers are settled soon after being initiated, they’re difficult or impossible to cancel once they’ve been sent.

  • Expensive
    This is the biggest downside of wire transfers, and it’s substantial enough to dissuade most businesses from using wire transfers as their primary vehicle for sending and receiving funds for basic business operations. When you add up the fees associated with sending (and sometimes receiving) wire transfers, the method doesn’t make sense as a cost-effective payment strategy.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular situation.

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