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Wire Transfers vs EFTs

Wire transfers and EFTs are the most dominant technologies in the money transfer world, and while they are often confused with each other there are distinctions between the two. As businesses grow and the movement of people across borders increases, there is a need for fast and safe ways to send money from one person or entity to another, and both wire transfers and electronic funds transfers have helped to fulfill this consumer demand. This guide will take you through everything you need to know about electronic funds transfer vs wire transfer.

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What is the difference between a wire transfer and an EFT?

There are subtle differences between wire transfers and electronic funds transfers (EFTs), which mainly centre around the fact that wire transfers are a specific type of EFT.

A wire transfer refers to an electronic transfer of funds between individuals or entities across a network of banks and non-bank financial institutions such as money transfer agents and specialist money transfer institutions. Instead of moving funds physically, the remitting institution sends instructions via a secure messaging system - such as the SWIFT network - to its receiving counterpart asking it to deposit its reserve funds to the recipient account referenced.

Once these instructions have been received, the two institutions can then settle the payment details between them in order to record the transfer of funds. Wire transfers are done through a network of banks or transfer providers from one account to another. Generally, wire transfers are available immediately, and cannot be reversed once initiated. Make sure you've entered the correct details, as it might be difficult to reverse the transfer.

An electronic fund transfer (EFT), on the other hand, moves money from one bank account to another bank account and is an umbrella term that covers any form of transferring funds electronically. EFT payments are commonly used by businesses to pay vendors and employees, while consumers will often use electronic transfers to make purchases online.

In short, while a wire transfer is a type of EFT, there are other forms of electronic fund transfers, too.

What types of transfers are defined as EFTs?

The term ‘electronic funds transfer’ brings together the whole variety of electronic payments which include are but not limited to the following:

  • Telephone instructed transfers

  • Computer-based transfers including online transfers

  • Magnetic tape or card payments

  • Automated teller machine (ATM) transfers

  • Point of sale transfers

  • Direct deposits and debits of funds

  • Bank transfers

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How do wire transfers and electronic fund transfers work?

Wire transfers

Wire transfers will usually go from one bank to another using the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network.

This network is a secure messaging system used by banks to send information - including wire transfer details - to one another worldwide.

Here's the typical process for a wire transfer:

  • Step 1: The initiator of the transfer fills in an electronic or manual wire transfer form instructing their bank to pay a certain amount to a designated beneficiary. The form captures, among other details, the beneficiary’s name and address, bank name and address, account number, branch, IBAN, ABA, SWIFT or BIC code, location, and country.

  • Step 2: The remitting bank processes the instructions and sends them via a secure messaging system such as Fedwire or SWIFT to the receiving bank ordering it to credit the specified customer’s account.

  • Step 3: The receiving bank then verifies the instructions as received and credits the account of the customer referenced.

How long will a wire transfer take versus an EFT?

Wire transfers

Wire transfers are processed instantly in many cases, which is why they will often have higher fees than other EFT payment types.

International wire transfers can take longer, however, up to several working days.

If you'd like to know more about the best way to wire money, check our wire transfer guides.

What are the different types of payments you can make with each process?

Wire transfers

Wire transfer payments can look like:

  • A bank-to-bank transfer using your financial institution to send money either domestically or internationally

  • A transfer initiated by a non-bank institution such as a money transfer operator. These can be used to send money domestically, but are most commonly used for international money transfers

What are wire transfers and electronic fund transfers most commonly used for?

Wire transfer

Wire transfers are a good option if you need to send or receive money urgently. This is because wire transfers are a rapid (instantly, in many cases) and secure way of sending money to your recipient, whereas other forms of bank transfer such as ACH payments can take longer.

Wire transfer fees versus EFT fees

Wire transfers

Wire transfers usually have higher fees than electronic fund transfers because of how much quicker they are processed. Read up on the wire transfer fees for US and UK banks.

The cost of wire transfers can be divided into two different scenarios: domestic (BACS in the UK and SEPA in the EU) and international transfers. When done through banks, domestic wire transfers cost an average of $15 for incoming transfers and $25 for outgoing transfers. The cost for incoming and outgoing international transfers averages $15 and $45, respectively.

For international transfers, you also need to be aware of the exchange rate margins charged by your provider for currency conversions.

How secure are wire transfers and EFT payments?

Most banks and non-banking financial institutions have invested in superior technologies to help keep clients’ funds safe. On top of that, they are regulated by bodies such as the Financial Conduct Authority, the Financial Crimes Enforcement Network, and the Australian Transaction Reports and Analysis Centre (depending on where they operate) which have stringent security requirements.

Wire transfers

The parties involved in wire transfers are usually checked and have their details verified in line with strict Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) policies. Also, financial instructions are sent through a secure messaging system such as SWIFT or Fedwire.

Additionally, regulatory authorities require that banks and money transfer companies use technologies such as SSL to secure client communications.

Are wire transfers and EFTs different to telegraphic transfers?

Telegraphic transfers and wire transfers refer to the same thing. However, EFTs are an umbrella term covering both wire and telegraphic transfers among other types of transfers.

The name telegraphic transfers or TT arose from the use of telex, an antiquated telephone system, to send money transfer instructions. Today, telegraphic transfers are sent using the SWIFT system.

Other transfer options

Other than wire transfers and electronic funds transfers, there are a number of other options when transferring your money. These include:

  • Mobile money transfers: With mobile transfers, funds can be sent from a bank account, mobile money transfer service, online money transfer service, or cash-based money operators. Transfers are normally instant and often limited to small amounts.

  • Cash pickup: When making a cash transfer, funds are sent to the beneficiary so that they can collect it in cash from a pickup point. The recipient does not need a bank account to receive the money and transfers take a few minutes.

  • Home deliveries: In countries like Vietnam and Thailand, money can be sent through online money transfer services and delivered in the form of cash right at the recipient’s doorstep.


Wire transfers and EFTs offer a secure and convenient way to move funds between individuals and businesses across the world. The transfers can be made through banks, high street money transfer companies like Ria, Western Union, and MoneyGram, or through online money transfers like OFX, Currencies Direct, Wise and WorldRemit.

Although used interchangeably, wire transfers and EFTs are not exactly the same thing. EFTs refer to the entire realm of electronic-based payments including wire transfers and ACH payments. This means that while wire transfers are a form of EFT, ETFs are not a form of wire transfer.

In terms of speed and safety, wire transfers employ a much more stringent security protocol than other forms of EFT. The other EFTs such as POS and card payments are also secure, but they require a little more vigilance on the part of the sender.

Apart from wire transfers and EFTs, there are alternative money transfer options you can look at such as mobile money transfers, cash pickups and home deliveries. It’s always best to bear all options in mind before making a transfer, and our money transfer comparison tool can help you find out the best way to make a transfer in seconds.

Best options for international money transfers

Wire and electronic transfers are valid choices for sending money abroad. However, their fees are too high, and the transfer speed is too slow. Instead, choose money transfer companies to get a better deal. Some offer a mixture of variable and fixed rate pricing. This means that you can get a good deal when sending small and large amounts of money.

TorFX is an example of a transfer provider that offers a better deal than bank transfers for sending money internationally. They do not charge fees for transfers but instead require a small markup percentage for currency conversions. Also, they offer multiple transfer methods to offer better flexibility for different customers.

Send money with TorFX

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Article Factchecked by Elliot Laybourne on 20th July 2022. Elliott is a former investment banker with a 20 year career in the city of London. During this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making. During this time, Elliott’s client list included Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and the Pennsylvania State Public School Employees Retirement System, amongst others.

April Summers
April Summers
April is a trained journalist and the Content Editor for She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she's not writing about global remittances she can be found daydreaming about her next holiday abroad.