What is a wire transfer? The goal of international wire transfers is the quick transfer of funds, eliminating the delays caused by mailing and clearing of checks. While people often use the terms "wire transfer" and "bank transfer" interchangeably, this is not 100% accurate: wire transfers are used by both banks and non-banking financial institutions. This means that all bank transfers are wire transfers, but not all wire transfers are bank transfers.
This handy guide will take you through all you need to know about international wire transfers, how to wire money and whether you should use them when sending your hard-earned money abroad.
What is an international wire transfer?
A wire transfer is the electronic transfer of funds from one person to another via a bank account or a money transfer account held with a specialized provider (e.g. a credit union). There is no physical transfer of money between banks or financial institutions when conducting a wire transfer. In fact, only information is exchanged between the institutions about the recipient, their account details and the transfer amount, with the transfer itself happening electronically.
The difference between wire transfers and bank transfers
The two terms wire transfer and bank transfer are often used to describe the same thing, but this is not always the case. A bank transfer is a term used to describe the process of transferring money from one bank account to another. This transfer could happen between two different types of bank accounts of the same person (for instance, from savings account to a checking account), but more commonly, the term refers to the process of transferring funds from one location to another (even overseas) via banks.
Conversely, an international wire transfer is a more generic terminology which refers to sending money electronically from one location to another. So, we can say that a bank transfer is a type of wire transfer, along with other types of wire transfers as well. For example, to send money from Canada to France, you may use a bank transfer, or you may wire it through MoneyGram, Western Union or another money transfer provider.
The difference between wire transfers and electronic funds transfers (EFTs)
In Canada, many banks use EFTs to move funds from one bank account to another, but while wire transfers are a form of EFTs, EFTs are not wire transfers. An EFT is a great option for transferring money between two accounts in Canada when same day or next day receipt is acceptable. Most EFTs in Canada are sent through Lynx, a high-value payment system used to send Canadian dollar transfers between participating financial institutions across the country. Lynx is also used for the Canadian leg of international money transfers.
How do wire transfers work?
The majority of international wire transfers are processed via the SWIFT network, and this is certainly the case in Canada. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a secure messaging system used by banks to exchange information quickly and securely, including instructions for wire transfers. This network spans 200 countries and includes over 10,000 banks and financial institutions Visit our guide on how to secure your savings if your financial institution fails with the Canada deposit insurance corporation.
In Europe, your international wire transfer is likely to be processed as a SEPA payment. SEPA (Single Euro Payments Area) operates in a similar way to the SWIFT network, but its purpose is to provide low-cost and fast Euro-denominated transfers to the 36 countries that are part of the group. All 27 EU states are members of this group.
When you send a wire transfer, the instructions are sent to the recipient's bank either directly or through an intermediary bank. There are costs associated with using the network, which can vary depending on the currency and amount being sent, so be sure to check before deciding on how to wire money.
Most money transfer companies enable international wire transfers in the same manner, but they operate a bit differently. They employ specialized technologies that connect local banks across the world, helping to reduce costs and transfer times. We will talk more about choosing the best money transfer providers in the upcoming sections.
What you need to know about wiring money internationally
Wiring money internationally is a popular way of sending money abroad. The electronic nature is this type of transaction makes sending money via wire transfer fairly hands-off, requiring you only to know your recipient's name, bank details, and the sum you are sending abroad.
However, there are a few caveats to wire transfers you may want to consider when deciding if this is the right option for you:
Wiring money internationally via your bank can be expensive: An international wire transfer processed via your bank can incur large fees (anywhere between C$10 to C$50), as well as a high markup on the interbank exchange rate. You may also need to take into account any fees likely to be charged by your recipient's banks, which could leave them with much less money than you meant to send.
One-off sums vs frequent smaller amounts: Typically, wiring money internationally will work out cheaper if you can send a larger sum in one go than incurring fees on smaller sums sent multiple times.
If you want to know more about wire transfers, check out our wire transfer guides below; otherwise, continue reading.
Learn the difference between services
Pros and Cons of Wire Transfers
Wire transfers offer a convenient and secure way to transfer money across borders, which is why they are one of the most popular ways of sending money. Whether you want to send funds to your family living overseas or to one of your suppliers in another country, wiring funds is a simple and efficient money transfer method.
Here are some of the pros and cons of using wire transfers when transferring your money:
- Speed: In most instances wire transfers take 1-2 days. In some cases and depending on the currency, the amount and the service you are using, the transaction can be near-instant and the fastest way to wire money.
- Safety: Both banks and specialised money transfer providers must adhere to financial regulations put in place in the country they operate in. Wire transfers are a commonly used method of sending funds, so any business that offers money transfer services will have experience keeping your transactions secure.
- Convenience: You can send money to any part of the world from the comfort of your home via the internet. All you have to do is log in to your online banking and make a transfer. However, circumstances might be different for those planning on sending a large sum. On these occasions, your provider might require some additional information.
- Global reach: Wire transfers can facilitate the delivery of funds to almost anywhere in the world, in any currency (as long as you find the right provider).
- Cost: Wire transfers can be expensive; there are several money transfer companies that have decreased their costs substantially, so research is crucial to find out the cheapest way to wire money. Generally speaking, wire transfers are likely to be accompanied by higher exchange rate markups and fees than some other payment methods.
- Non-reversible: If a mistake is made when entering details of the wire transfer, it can be very hard to reverse. Be sure to double check details are entered correctly before sending.
5 best ways to wire money internationally
These days, it isn't just traditional banks that can initiate a wire transfer abroad. Money transfer providers are well equipped to move your funds online, often for lower fees and more competitive exchange rates. At a glance, the top 5 best ways to wire money internationally are:
Provider | Visit |
|---|---|
XE | |
Wise, formerly TransferWise | |
WorldRemit | |
OFX | |
Remitly |
Below are some of our top recommended transfer companies in a bit more detail.
1. XE
XE has a large distribution network, supporting transfers in 60 currencies to over 170 countries worldwide. This online money transfer is a popular and trusted name in the industry with no transfer fees for sending money internationally, although their exchange rate markup can be higher than some other providers in some cases. Transfers can take anywhere between 1 - 4 working days, depending on the specifics of your transfer.
2. Wise, formerly TransferWise
Wise is an extremely well-known online money transfer operator, with over 8 million users worldwide. The company is popular for its policy to always provide transfers at the mid-market rate, with a transparent fee structure that clearly explains the fees you’ll be charged for any international transfer. Transfers can take anywhere from minutes up to 5 working days, taking longer you if pay for your transfer via bank account.
3. WorldRemit
Supporting transfers to over 150 countries across the globe, WorldRemit is popular for its versatile delivery options, including cash pickups, mobile airtime top-ups, and bank transfers. With over 2 million people using WorldRemit’s services in the last year alone, this is a well-trusted company supporting a wide range of transfer options. Transfers with WorldRemit could be instant, or they could take up to 3 working days for your recipient to receive the funds in their account.
4. OFX
OFX is known for offering competitive exchange rates with no transfer fees, making it a popular choice for affordable international transfers via the company’s user-friendly online platform or mobile app. With OFX, transfers will typically take between 1 and 5 days to be processed.
5. Remitly
Remitly supports transfers to over 50 countries worldwide and has over 140,000 agent locations worldwide to support in-person transfers and cash pickups. Remitly is well-known for providing a high-quality service with a range of payout options, even including home delivery for added convenience for your recipient. Transfers with Remitly can take minutes, or between 1 and 3 working days for a transfer with lower fees.
Alternatives to wire transfers
Bank transfer
International bank transfers can be a convenient way to wire money internationally because, typically, all you'll need is your recipient's bank details plus the sum you are sending. However, it's worth bearing in mind that though convenient, banks usually come with higher international bank transfer fees when it comes to international wire transfers - not to mention one of the slowest.
SWIFT transfers can take anywhere from 1 to 5 working days, although this can be affected by factors including the destination you are sending to and what day of the week you are sending the funds. For this reason, it's important to make sure you've got the correct details for your recipient, as an incorrect digit or entry can delay your transfer even more.
Canadians wishing to send money to bank accounts within Canada and the United States, can also send an Interac e-transfer. This service is available to all Canadians that use online banking and works in a similar way to an e-cheque. Although, while Canadians can sent money to the US thanks to partnerships with Western Union and MasterCard, the service is only available to Canadian bank account holders and therefore can't be used to send money from the US to Canada.
Online money transfer provider
Online money transfer providers are an extremely popular option for sending money internationally and tend to be a much cheaper and faster way to wire money internationally.
Money transfer providers will either charge a set fee for your international transfer at the mid-market rate (such as TransferWise), no fees but a markup on the exchange rate (such as OFX and XE), or a mixture of both (such as World Remit).
Sending money internationally online
Online transfer providers are an extremely popular option for sending your money internationally, offering: Lower fees More competitive exchange rates Faster transfer times Whether you're looking to send money abroad as a one-off payment or as a regular thing, researching money transfer providers could potentially save you a lot of money.
Walk-in transfer providers
Another option for wiring money internationally is to use a walk-in transfer provider with a physical location, such as Western Union or MoneyGram. These options can be convenient if you would prefer to talk to someone in-person, and both provide the option to deliver your funds to your recipient as a cash pickup.
How to send an international wire transfer?
How to wire money is generally pretty straightforward. The process typically works as follows:
Decide on a money transfer provider
Gather all the information you need
Familiarise yourself with the fine print
Fill out the wire transfer forms
Track your wire transfer
More money transfer guides
What are the fees associated with wire transfers?
International wire transfers, despite their convenience, are not always the cheapest way to send money. When making an international wire transfer, the two costs you will have to look out for are exchange rate mark-ups and fixed transfer fees.
Exchange rate mark-ups
In order to find out the cheapest way to wire money, most people search the exchange rate before making an overseas wire transfer and expect to get the same exact rate for their transaction. However, this is rarely the case. Banks and financial institutions charge a markup on the mid-market rates (the rate you see on search engines and from financial news services). Banks are known to charge 4 - 6% margins, whereas specialized money transfer providers often keep their margin at 0.5 - 2%. It's important to compare the exchange rates before you go ahead with the transaction, especially if sending a large amount of money as a small percentage increase can cost you a lot of money.
Fixed fee
To make a wire transfer, you may have to pay a fixed fee to the bank or provider. The fee can range anywhere from C$10 - C$50, depending on the bank or payment provider you choose. Banks typically charge both a fixed fee and an exchange rate margin on wire transfers.
Wire transfer fees can be quite high depending on the number of intermediary banks involved. However, there are many money transfer providers that charge only a fixed fee and no exchange rate margin. This fee is sometimes also much lower than you'll find with a bank. Again, it is all about choosing the right provider.
What to look out for when wiring money internationally
As well as cost, there are a number of other factors to watch out for when sending money internationally that can affect your overall experience. These factors are all taken into consideration in our comparison tool to help you find the best service for your sending needs and include:
Security
User reviews
Transfer speed
How long do international wire transfers take?
When you want to wire money abroad, you should keep in mind how long does a wire transfer take. International wire transfers can take anywhere between 1 - 5 days, depending on various factors, including the origin and destination country, the amount being transferred, and the currencies used. Many non-bank transfer providers are able to reduce the wire transfer times by utilizing technology that connects local bank accounts across the world. Some even offer near-instant transfers for users transferring money along a corridor in which the provider specializes. Using an online money transfer provider to send your money, for example, can get your funds to your recipient's account within minutes (especially if you arrange for the transfer to be a cash pickup and you pay by card). But, how long does a traditional wire bank transfer take? It can take longer, closer to 3 - 5 business days.
What is the cheapest way to wire money internationally?
The cheapest way to send money abroad really depends on:
The sum you are sending
The currency pair you are converting between
How fast you want your recipient to receive the funds
Charges associated with sending money abroad can be broken down into a few key areas:
Fixed fees
Exchange rate markups (a percentage added on to the mid-market exchange rate)
Charges for particular payment methods, such as credit card fees
Finding the cheapest way to wire money internationally, therefore, really depends on comparing these various charges for the individual circumstances of your transfer. Typically, an online money transfer operator such as the examples listed above will give you more competitive exchange rates and lower fees than wiring money abroad with a traditional bank.
Bottom line: should you wire money internationally?
A wire transfer is a method of transferring money electronically between people or businesses across the world. It only involves an exchange of information between the institutions about the recipient, their account details and the transfer amount. This means that a bank transfer is a type of wire transfer, but there are other non-banking financial companies that can also facilitate wire transfers. Examples of these services are money transfer companies such as Wise or WorldRemit.
Wire transfers offer a convenient and secure way to transfer funds. You can send money anywhere in the world. However, it's good to be aware that they can be costly as you may have to pay both a fixed transfer fee and exchange rate mark-ups when sending your money. These fees are often higher than you'll find with other payment options.
It is important to shop around and make comparisons to get the best rates and lowest fees on your transaction, as there are a lot of providers now offering wire transfer services at different rates. Before deciding on how to wire money, quickly compare your options by filling out our form. So you can find out your best option in minutes and ensure your recipient gets the maximum amount possible of the money you are sending.
