International Wire Transfer

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What Is an International Wire Transfer?

An international wire transfer (also known as an "international bank wire") is a type of bank transfer that delivers funds from a bank account in one country to a recipient bank account in another country via SWIFT.

A standard foreign exchange service offered by most banks, international wire transfers are a secure method of funds transfer that typically involves currency exchange due to their international nature. As a result, all of this makes international wire transfers one of the most well-used methods of sending money internationally, but also one of the most expensive due to the number of steps and third parties involved, as well as the fact that currency conversion takes place.

Understanding International Wire Transfers

When wiring money internationally, a number of steps and parties are involved. On the one hand, there's the sender of the money and their bank, and on the other, there's the beneficiary and the beneficiary bank.

When the sender instructs a wire transfer with their bank, the sending bank then sends their funds via SWIFT, a global network that allows banks around the globe that often don't have the networks, resources, or operational expertise to conduct financial transactions with one another directly. After an international wire is sent, the recipient bank account is identified by their SWIFT number, which functions as an international version of country-specific bank identifiers such as routing numbers in the US, sort codes in the UK, and transit numbers in Canada, for example.

Funds transferred via SWIFT often require the assistance of correspondent banks or intermediary banks to arrive at their destination. These specialised financial institutions act as "middlemen" in the process of transferring money from one bank to another over SWIFT and are permitted to detract a fee of practically any amount directly from funds being transferred, all without the knowledge of the sender and their bank.

How To Do an International Wire Transfer

In general, making an international wire transfer tends to be a simple, fast, and secure process.

To instruct an international wire transfer, you'll need to visit your bank's website to verify what information you'll need from your beneficiary in order to process a bank wire. These generally include most or all of the following pieces of information:

  • The beneficiary’s full name;
  • The beneficiary's postal address;
  • The beneficiary's account number;
  • The beneficiary bank's branch number and full address;

With these details at the ready, you'll be able to log in to your online banking portal and instruct an international wire transfer directly from there. Alternatively, you can also visit your bank branch to send a bank wire too, although this service tends to come at a steeper price.

International Wire Transfers: The Costs

As touched on above, one of the major drawbacks of international wire transfers for many people is the costs involved. These costs involve two parts: transaction fees (including correspondent and intermediary bank fees) and exchange rates.

International Wire Transfers: Fees

Because transfer fees are imposed by the sending bank, the cost of wiring money internationally varies significantly, not only from bank to bank but also from country to country:

US banks, for example, tend to charge a single, fixed fee for international bank wires that usually falls in the range of US$25.00 to US$40.00 per transfer. In the UK, high-street banks often advertise themselves as being "fee-free" for international wire transfers, although it's not unusual for them to charge a fee of up to £20.00 for transfers to certain countries.

In Canada, transfer fees vary dramatically (usually falling between C$3.00 and C$30.00 or higher per transfer) and tend to be steeper the more one wires. In Australia, these fees range between A$6.00 and A$30.00, while major New Zealand banks tend to charge fixed fees between NZ$10.00 and NZ$20.00 per transaction.

In South Africa, international bank transfers involve a commission of around 0.50% of the transfer value (with minimum and maximum caps) in addition to a fixed fee that's usually in the ballpark of R100.00 to R200.00 per transaction. Similarly, most Singaporean banks also charge a commission for telegraphic transfers (usually in the region of 0.125% of the transfer value) in addition to a fixed fee of S$20.00 to S$30.00 per transfer.

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Avoid 'OUR' Payments

International wire transfers open the door to correspondent bank fees, which can be as high as US$100.00 per transfer (or currency equivalent.) As such, if you're asked to choose between 'SHA,' 'BEN,' and 'OUR,' we recommend you avoid choosing 'OUR' payments wherever possible. These instructions can open the door to third-party banks levying further fees from you long after the transfer has been sent.

International Wire Transfers: Exchange Rates

The second cost of sending an international wire transfer is the exchange rate margin, the difference between the mid-market exchange rate and the exchange rate offered to consumers.

Exchange rate margins fluctuate continually in relation to broader dynamics in the foreign exchange market, meaning they can be hard to pin down. However, for most banks generally, exchange rate margins tend to range from as low as 1.50% of the transfer value to as high as 15.00% or more at the extremes. (It's worth noting that exchange rate margins tend to be lower for transfers to major world currencies and higher for transfers to more obscure or volatile ones.)

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In contrast, PayPal levies exchange rate margins of between 2.50% and 4.50% of the transfer value for international payments. Currency exchange giants such as Western Union and MoneyGram usually levy margins between 0.50% and 1.50%, and digital transfer specialists offer margins that are lower still.

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Exchange rates are often levied proportionally to transaction fees to account for the full cost of making an international wire transfer. For example, UK banks tend to charge most (often all) of their fees as exchange rate margins, and as a result, their margins are high (often around 8.00% to 10.00%) while their transfer fees are low or nonexistent. On the other hand, Singaporean banks tend to levy a bulk of their international transfer fees in fixed and commission fees, resulting in higher fees and lower exchange rate margins. US and Australian banks tend to be somewhere in the middle.

Savvy Alternatives to International Bank Transfers

While international bank wires are the preferred option of many people for sending funds abroad, the major drawback is without a doubt their cost, followed by their transfer speed (they take up to five days to arrive in a beneficiary's bank account.)

For these reasons, we generally recommend avoiding bank wires when sending money internationally. Instead, we recommend comparing money transfer specialist services to get the job done more quickly and cheaply. These services — which include Wise, Paysend, Remitly, TransferGo, and others — make use of a savvy network of global bank accounts to dodge SWIFT altogether, allowing them to offer faster payments and lower fees to their customers. Take a look at Monito's in-depth guide to learn more about the difference between money transfer specialists and banks for international payments.

To compare your options from among this competitive market of services, run a search Monito's real-time comparison engine to find the best deal for your next transfer abroad:

Compare The Cheapest Alternatives

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The Monito Glossary

When it comes to moving money, don't let yourself be bogged down by all the jargon. Explore The Monito Glossary to get up to speed with everything you need to know about money transfers.

Frequently Asked Questions About International Wire Transfers

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