International wire transfers explained and how to set one up

Key takeaways:

• International wire transfers are easily completed via your bank within 1–5 business days.

• If you send wire transfers through your bank, expect to pay transaction fees and foreign exchange rates.

• Alternative providers, like Airwallex, can cut costs and time for businesses with superior FX rates and multi-currency bank accounts.

Global wire transfers move trillions across borders every day, making them one of the most familiar ways to send money internationally.

One of the largest systems behind these transfers is the Swift network, which securely connects thousands of banks and processes over 53.3 million payment messages daily¹. But how do international wire transfers really work, what do they cost, and are there faster, cheaper alternatives for businesses? This guide breaks down the essentials of international wire transfers, highlights the pros and cons, and explores modern options like SWIFT transfer alternatives that can save money and time.

What is an international wire transfer?

An international wire transfer is a method of electronically transferring money between people or businesses. It’s also known as a telegraphic transfer or electronic transfer of funds.

When money is wired, it travels through a network of banks to reach the recipient. Because some banks don’t have a direct correspondent relationship, intermediary banks may be used to help route international wire transfers and facilitate the transfer.

How do international wire transfers work?

An international wire transfer works by moving money electronically from one bank account to another, across borders, using a secure messaging system like Swift. Here’s a clearer breakdown of the process:

• Step 1: Sending the request: You (the sender) initiate a transfer online, at a branch, or via a mobile app, providing the recipient’s account details and the amount to send.

• Step 2: Verification: Your bank verifies your identity, checks you have sufficient funds, and confirms the payment details.

• Step 3: Processing & routing: Your bank deducts the funds plus any fees, then sends the payment instruction through the Swift network or another secure channel. The instruction may pass through one or more intermediary banks before it reaches the destination.

• Step 4: Receiving: The recipient’s bank receives the instruction, applies any incoming fees, converts the funds if needed, and deposits the money into the recipient’s account.

Because multiple banks can be involved, transfers are secure but can take 1–5 business days and attract multiple fees along the way. That’s why many businesses now look for alternatives that are faster and more cost‑effective.

Types of global wire transfers

There are various types of wire transfers, including bank-to-bank transfers, online wire transfers, and cash office transfers, which vary depending on the region or country. For example, in the United States, the Automated Clearing House (ACH) system is commonly used, whereas in Europe, Single Euro Payments Area (SEPA) transfers are prevalent. In Australia, we use the Bulk Electronic Clearing System (BECS).

Here, we’ve outlined four different examples of wire transfers – SWIFT, BECS, ACH, SEPA, and FPS – making it easier to select the most appropriate method based on specific business needs.

*The SEPA region comprises the 27 European Union (EU) member states along with four non-EU countries (Iceland, Liechtenstein, Norway, and Switzerland) that have adopted the euro as their currency. These countries collectively form the SEPA zone where standardised euro payments can be sent and received.

How to do an international wire transfer

There are a few different ways to initiate an international wire transfer depending on your preference and your bank’s services. The process can usually be done online, in person at a branch, or even over the phone. Below, we outline each option so you know what to expect.

Transfer money internationally through your bank online

Most banking services are now available online, including domestic and international wire transfers. Search your bank’s website or online member portal to find the specific process, but here’s how it typically works:

1. Log in to your online banking portal and find “wire transfers.”

2. Submit recipient information, such as their name, bank name and address, account number, account type, and SWIFT code.

3. Specify the transfer amount, including the received currency for the deposit.

4. Pay all fees, including transfer costs (for each and every bank that handles the money) and any foreign exchange rates.

After that, the bank takes over and will contact the recipient’s bank and the necessary intermediary banks to complete the transfer. This process can take up to five days.

Transfer money in person or over the phone

If online isn’t for you, banks also initiate international wire transfers in person and over the phone. The process is pretty similar to the online banking service:

1. Contact your bank in person or over the phone to initiate a transfer.

2. Submit all relevant information, including your personal details and the recipient’s personal and banking information.

   1. Recipient bank’s name and address

   2. Recipient’s name and address

   3. Recipient’s account number and account type

   4. Recipient bank’s SWIFT code

3. Confirm your transfer amount and received currency.

4. Pay your service fees.

This process may not be any faster or cheaper than online, but you can ask questions directly and confirm everything is ready for transfer more easily.

Use international transfer services to send payments

Finally, you can skip your regular bank altogether and complete international transfers with alternative providers.

Again, this process looks a lot like the online banking transfer option, but the specific interface and fees vary between providers. They also have more specialty features to cater to individual needs.

For example, Airwallex is an all-in-one solution for international businesses to maintain multi-currency Global Accounts, and for businesses to easily accept payments and make multi-currency expenses quickly, and affordably. It even has payment APIs to programmatically manage financials, including payments, payouts, and more.

Businesses that regularly transact with different currencies may benefit from a multi-currency business account that Airwallex offers since we already support the most common global currencies.

International wire transfers: things to know

International wire transfers are secure and widely used, but they’re not always straightforward. Costs can stack up quickly, timing varies between providers, and there are regulations and hidden fees to watch for. The sections below break down what it really costs to send money overseas and how long it typically takes.

A quick look at the pros and cons of global wire transfers

Hidden fees and FX rates

Several costs are associated with international wire transfers. Here are the key fees to know:

• Transaction fees: These are charged by both the sender’s bank and the receiver’s bank, as well as any intermediary banks involved. These fees often increase when sending money across borders. On average, banks charge between $25–$50 USD per transfer.

• Exchange rate margins: Banks usually charge a higher foreign-exchange rate than the standard interbank rate, often ranging from 3%–5%, which can significantly increase the cost of larger transfers.

Fees vary by service provider, so shop around to find the best rate. And you don’t have to stick with your bank.

Airwallex offers a faster and more cost-efficient alternative to traditional wire transfers, enabling businesses to send instant payments around the world via local payment routes at market-leading rates while expense management software in one place.

Limitations and regulations

International wire transfers come with its own rules and regulations set and enforced by local banking regulations and transfer service providers themselves.

There's no dollar limit to how much you can legally transfer, but your bank or transfer service might have its own rules to follow.

Regulations also vary from country to country. For example, the United States Internal Revenue Service will want to see your international wire transfers reported, and they’re particularly interested in cumulative transfers over US $10,000. Your bank will report any large transfers to cover their liability and help identify any suspicious activities.²

So, the higher the transfer’s value, the more requirements a provider or local banking regulations may enforce for the transfer. A $10,000+ transfer in the U.S. might require that you provide:

• Proof of source documentation to validate where the money comes from.

• Personal wealth documentation about your typical income streams.

• Proof of ID and further information about the recipient.

• Purpose of the transfer.

Depending on the transfer, you’ll also have to pay taxes on the amount. This is particularly true if you exceed a certain dollar amount transferred into a foreign bank account or send transfers for business purposes.

Risks and safety measures

Wire transfers are generally considered to be a secure method of transferring funds. However, there are some associated risks:

• Scammers may impersonate suppliers or staff (invoice fraud) and trick businesses into wiring money to the wrong account.

• Phishing attacks can steal your banking credentials and initiate unauthorised transfers.

• Hackers that gain access to your account may be able to initiate wire transfers without your consent.

• Errors could result in funds being sent to the wrong destination.

• Hidden costs can result in problems when they are not factored into financial planning.

To mitigate these risks, you should:

• Always verify the identity of the recipient and double-check invoice details directly with them.

• Watch for red flags in emails or requests for urgent payment changes.

• Monitor your accounts for suspicious activity and enable two-factor authentication where possible.

• Keep your personal and financial information secure.

• Understand the fees and exchange rate margins associated with the transfer.

What information and documentation is needed to make an international wire transfer?

The exact details you’ll need to provide will depend on your bank or transfer service, the countries involved, and the size of the transfer. Generally, when sending money internationally you’ll need to:

• Verify your own identity (often by providing or uploading a valid form of ID, especially if it’s your first transfer).

• Provide your recipient’s full name and bank details (bank name, account number/IBAN, and branch address where applicable).

• Specify the amount and currency you want the recipient to receive.

For larger transfers, or when sending money to certain regions, you may also be asked to provide extra details such as the purpose of the payment and the source of funds.

Why choose Airwallex for international transfers?

International wire transfers are secure and accessible, but they’re also time-consuming and expensive. Global businesses are often better suited to alternative fintech services like Airwallex – a global payments and financial platform with its own proprietary payments network.

• Transfer funds efficiently and cost-effectively to 200+ countries in 60+ currencies

• Access local bank details in 60+ markets

• Open multi-currency accounts

• Settle like-for-like in 14+ currencies with no forced conversions

• Save up to 80% on FX fees compared to traditional banks

• Use Corporate Cards with spend controls

• Streamline expenses with integrated Expense Management

• Earn competitive returns on AUD and USD balances through Airwallex Yield

Ready to take control of your global money movement and future-proof your business for global scale? Switch to Airwallex international money transfers today.

International wire transfers: frequently asked questions

How long do international wire transfers take?

How long an international wire transfer takes depends on the process. Traditional transfers through a bank take one to five business days to complete. However, modern alternatives like Airwallex’s multi-currency accounts are as fast as local transfers, with approximately 90% of transactions arriving within the same day.

Ultimately, several specific factors impact your international money transfer speed, including:

• Service providers and institutions

• Country regulations and relationship

• Currency exchange

How much do international wire transfers cost?

International transfer transaction fees vary by bank and usually average between US$25-50.

Of course, there are also foreign exchange rates to consider if you’re transferring money into a new currency. These also vary by bank and can be harder to find, but they’re more expensive than the standard interbank rate.

What’s the cheapest way to transfer money internationally?

Costs vary, and wire transfer fees can impact your bottom line. So you should compare key wire transfer fees before committing to a service provider:

• Transfer fees

• Exchange rates

• Consider transfer size — some offer better or worse rates for higher amounts.

It also depends on your needs. A one-time transfer might be best suited for your bank, but specialised business accounts can help save time and money for cross-border businesses.

For example, Airwallex’s international business debit cards allow employees to easily handle day-to-day business costs, like paying suppliers and employees globally, without a five-day waiting period or expensive transaction costs.

What do you need for an international bank transfer?

Necessary documentation for a SWIFT transfer network service boils down to your personal information, the recipient’s personal information, bank details, and the transfer amount. More specifically, you’ll need:

• Bank identification, including name and address for the sending and recipient bank.

• Personal identification, including name, address, and potentially proof of ID for the sender and receiver.

• Bank account or IBAN numbers.

• Bank SWIFT account numbers.

• Transfer amount, including the deposited currency after exchange.

What is a wire transfer?

A wire transfer is a secure electronic transaction used to move funds between bank accounts. It is often used for international and domestic payments due to its speed and reliability.

How to do a wire transfer?

To do a wire transfer, gather the recipient’s banking details including their account number, bank name, branch, and SWIFT or IBAN code if sending internationally. Then, submit these through your bank’s online platform or at a branch.

How long does it take for international wire transfer?

The time it takes for an international wire transfer depends on several factors, but typically ranges from one to five business days. The duration of an international wire transfer is influenced by the sending and receiving banks, any intermediary institutions, and the destination country.

What’s the difference between a bank transfer and a wire transfer?

Bank transfers generally refer to any transfer of funds between banks, including BECS (Bulk Clearing House) transfers, which are typically slower and used for smaller amounts. Wire transfers are a specific type of bank transfer known for their speed, reliability, and international coverage, often used for larger sums.

How can I send a wire transfer quickly?

To expedite a wire transfer:

• Ensure all recipient details are accurate.

• Initiate the transfer before the bank's cut-off time.

• Opt for transfers using a multi-currency global bank account.

Sources:

1. https://www.swift.com/about-us/discover-swift/fin-traffic-figures

2. https://www.swift.com/about-us/swift-annual-review

3. https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca

Disclaimer: This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.