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Wire Transfers: How It Works? Pros and Cons of Wiring

Wire Transfers: How It Works? Pros and Cons of Wiring

09 Nov 2020


In this modern world, technology has assisted human beings with numerous inventions. It has also helped humanity with multiple facilities. Undoubtedly, you have learned about wire transfers, but this piece of information will provide you with complete awareness about the wire.

You would get the answers to essential questions about the wire. What is wire transfers? How do they work? And the pros and cons of wiring. Once you go through this information, you can confidently use this service with the ACE Money Transfer channel. 

What is Wire Transfer?

It is a useful technique to send money through the wire to your family and friends. The wire transfer is an electronic money transfer way that uses the network of Society for Worldwide Interbank Financial Telecommunication (SWIFT).

It offers you a facility to send money from one credit union or bank to your desired bank. Wire transfer avails you the facility to send money in your chosen foreign currency.

Wire transfer enables people to send money abroad. It is an easy method to use wire transfer because you may send an amount to the concerned account.

The recipient will receive it in cash if he uses the partner's wire transfer service site. Similarly, he may get it in cash if he gets it in his bank account.

How do Wire Transfers work?

Wire transfer is a global mechanism for sending and receiving currency, but it operates on a couple of networks. You can read how these networks run under the wire transfers umbrella here:

  • Swift Transfers to International Account

Society of Worldwide Interbank Financial Telecommunication (SWIFT) is a network of messages that worldwide link all the banks and financial institutions.

It has a specific code system for secure sending and receiving information among the financial institutions. It works differently in the following two ways:

  • Direct Relationship between Banks

It is a method in which banks have a commercial account in each other's banks. So, they discover a direct link between the banks. In this medium, one bank sends a SWIFT code to another for the transfer information. Once the second bank receives the message, the second bank will receive a specific amount from the first bank.

  • Indirect Relationship between Banks

It is another mechanism of wire transfer through the SWIFT network. In this process, the banks have no direct commercial account in each other's bank.

However, the two banks have an indirect relationship via the intermediary bank. It means the two banks will exchange the SWIFT message, but the intermediary bank will help transfer. This process takes a long time to transfer money between banks. It also charges additional fees from the customers.

  • SEPA Transfer to Europe

Single Euro Payments Area (SEPA) is another wire transfer network. It facilitates the money transfer method within Europe and in a single currency, i.e., Euro.

It would not be wrong to say that SEPA only supports the countries that have Euro currency. It works cross-border wire transfer, i.e., equivalent to the domestic transfers within their specific zone.

Pros and Cons of Wire Transfer

Wire transfer has many benefits of its use. However, it also has some disadvantages. Here you may know the pros and cons of the wire transfer.

What are the Advantages of Wire Transfer?

  • User Friendly in the Globe

It is effortless to send or receive money in this modern world with the assistance of wire transfer services. Wire transfer services make it possible to send money while sitting at home. It means you may send online from your account to the desired one with this service. Therefore, it will not be wrong to say that you may get the payment through wire transfer in your currency.

  • Quick Way to Transfer Money

It is a quick service to send money to your friend or relative without any long process. Once your process of money transfer ends, then the recipient may soon receive it. It is pertinent to mention here that every bank has its policy to process the payment at a specific time.

  • Available in Worldwide

Wire transfer services are almost available in all corners of the globe. It means you need not go to collect money very far from your residency. Apart from this, many wire transfer services have links with the bank. It means you would get numerous wire transfer services near your home.

  • Safe to Transfer Money

Wire transfers are safe to send or receive money. If you put your tracking ID, then you may quickly trace your money. You may transmit money in a considerable amount without any hindrance. It means wire transfer is a more comfortable and secure way to send and receive money to your friends and relatives.

What are the Disadvantages of Wire Transfer?

  • High Processing Fee

It is crystal clear that every service that provides the facility of money transfer also charges a fee. On the other hand, the recipients don't pay.

However, some companies in wire transfer also charge a small amount of payment to the recipient. Therefore, it becomes costly for the customer who uses wire transfer. It is the central issue of the decline in the usage of wire transfer.

  • Low Exchange Rate

Wire transfer is not providing a decent exchange rate. It means it also pays a low exchange rate than real-time exchange rates. Therefore, wire transfer does not produce a reasonable amount.

  • No Transparency

The wire transfer is a significant issue that does not disclose the additional amount of wire transfer charge for sending money to an account. Wire transfer keeps it as the hidden charges. It has no transparency at all.

  • Unable to Transfer in Batches

Wire transfer has no facility to transfer money in batches. It means a person cannot send an amount into small clusters, i.e., one by one to the desired person. It can send money in a single bundle.

  • Unable To Return Transaction

Wire transfer has an issue that you cannot reverse your transaction once you have done it. Sometimes, if you send payment to another person by mistake, you cannot get it returned. It is very risky to send money through wire transfer.

  • Scammers May Fool You

It is an attractive channel for scammers. However, a thief requires only a tracking number and transaction code for the scam. They can anonymously transfer through the wire. Once they hold the transaction code, then they scam your entire balance without any hindrance. 

Reason to Select ACE Money Transfer Services!

ACE Money Transfer provides the best online money transfer services with best exchange rates. As compared to wire transfer, online money transfer is more reliable & cost-effective method for online transactions.

Conclusion

It would not be wrong to say that wire transfer is a source to send and receive money to your friend & family. But wire transfers require you to pay the corresponding fees for your comfort and convenience.

As compare to Online remittance providing companies, bank to bank transfer cost you a lot. In most of the cases, wire transfer takes about four to five working days to process your money in recipients account. Besides, all this, It is necessary to send money to only people you know that may help you save yourself from the scammer's fraud.


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