Wire transfer is one of the most used ways of sending money between financial companies. The money transfer method allows you to send money both domestically and internationally. You can send wires using your bank or credit union account. Some platforms such as Western Union, Remitly, and MoneyGram allow you to send wires to others. Despite being a dependable method to send finances, there are various risk of receiving wire transfer, as we shall see shortly.
For your understanding, wire transfer allows you to send large amounts of money to people or companies. When purchasing a commodity such as a car, yacht, lorry, and so on, using a wire transfer to make your payments makes things smooth. Again, the transactions are complete within a short time, even when making an international payment. Above all, it is among the most accepted money transfer methods by many worldwide banks.
The option to send money by wires has made the world advance economically. You do not need to travel to a far country to get a commodity. Since commodities are being sold online, you have the chance to check the most exciting merchandise and then order with just a few clicks or taps. You then send funds through secure checkout portals and wait for your item to arrive. You only need to ensure that you use reputable merchants to avoid losing money.
How does wire transfer work
The operation of the wire transfer method is simple. All you need are the recipient’s details, and you are good to go. When making a domestic wire transfer, you need the routing and account numbers of the recipient. The routing number identifies the recipient’s bank, while the account number identifies the exact recipient. The transaction can take around 24 hours to complete.
When making international wires, you will require more things than domestic wires. You need the recipient’s name, bank’s SWIFT BIC, address, and bank account number. You may also require the International Payments System Routing Code for certain nations. International wires take longer compared to domestic ones. Recipients can wait for two days or more for their funds to arrive.
You can do wire transfers online or at a branch. Online transfer is fast and convenient compared to branch transfers. Again, you have to pay a transfer fee, usually a percentage of the money you transfer. The recipients should also pay fees to receive their finances.
How do wire transfers differ from ACH transfers
ACH and wire transfers allow you to transfer finances from one institution to another. However, the two methods are entirely different from each other. Wire transfers involve direct communication between the sending and receiving bank’s officials to facilitate the transfer.
However, ACH transfer has the Automated Clearing House, which stands between the sending and receiving banks to process transactions. Again, wire transfers complete faster compared to ACH transfers. ACH transfers can take more than three days to complete due to the lengthy processing.
What are the risk of receiving wire transfer
Making payments by wire transfers comes with several risks, including teller mistakes, fraud, and malware. Let us look at the risks in detail.
1) Challenging to recover money mistakenly send
When sending money through a wire transfer, the funds may not be recovered once sent. That’s why you should exercise extra caution before hitting the send button. The funds are long gone when you know you have made a mistake.
Usually, fraudsters lure people into using wire transfers because they understand that you cannot stop the money from reaching them. That is why some people prefer ACH over wire transfer since you can easily cancel an erroneous transaction using ACH.
2) Malware and virus threats
There are dangers to your online account being attacked by malware and viruses. Suppose your computer is not up to date or you are using an insecure browser. In that case, hackers will likely intercept your transaction via malicious software. That way, you may find yourself losing a lot of money.
Again, the hackers may get your account details easily, log into your account, and clear your balance within minutes.
3) Scammers
You may be lured to send money to claim a lottery you have just ‘won’ and end up wiring money to scammers. They will then go mute and not send you the funds they purported you had won. Others may tempt you to give them your banking credentials for them to wire money to your account only to steal from you.
4) Teller mistakes
If you are receiving money from someone through a wire, the sender may decide to send the funds to a branch. That means they will use the teller services. The teller may make a mistake when inputting your details, and you will not receive the money.
How much money can you receive through a wire transfer
Wire transfers allow you to send and receive large amounts of money. No law limits the amount you can send or receive through wire transfer. However, various banks usually have daily, weekly, or monthly limits.
For example, Bank of America allows you to wire $1,000 per 24 hours. Receiving may not be limited since you cannot control who sends you money. However, the bank must investigate the source of the funds. We all know that criminals have increased, and terrorists, human traffickers, drug dealers, and so on can transfer money through banks and other institutions.
Why have I not received my wire transfer
If you gave someone or a company your bank details to send you wires and have not yet received them, there could be several reasons for the issue. They include the following.
- You provided the wrong details to the sender. They include account numbers, BIC, or routing numbers.
- Your account may be inactive
- Your bank’s systems have issues.
You can tell the sender to confirm with their bank to check the issue. If your bank delays the transfers, you can ask them about the matter.
Bottom line
Wire transfer is among the most used money transfer methods worldwide. You can make an international or a domestic transfer. When you send domestic wires, they can complete within 24 hours. However, international wires can take two days or more. The money transfer method is faster than ACH, which takes several days to finish. You can send wires online using your phone or computer, saving time and energy.
