What Are Wire Transfers?

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What Is A Wire Transfer And How Does It Work?

When you send money electronically to another person or company, you are doing a money wire transfer. Wire transfers appeared a long time ago when telegraphs were invented.

At that time, you gave the money to a bank or to the telegraph office. The agent would send a notification to the receiver telling him to pay a specified amount to a determined individual. Afterwards, the financial institution would send the money to adjust the imbalance in its other agency.

Nowadays it's done in a similar way. You can go to a wire transfer company or bank and tell them to send the money to a determined place in the world and they will transfer the money immediately. For the user, this service hasn't changed much. The advantage for him is that the cost has been greatly reduced and the financial institution doesn't need to send the money, physically, to the agency that made the payment.

Currently, financial institutions in the USA use a federal communications network called Fed Wire. This system is owned and operated by the Federal Reserve and is used for sending and receiving money inside the United States. If you require to send money abroad or receive it from another country, then the financial institution will use a foreign bank to complete the order. Unfortunately, the world hasn't become electronic enough, so this service could last one or two business days.

Where Can I Make A Wire Transfer?

Right now there are two known companies that have offices around the world. One of them is Money gram, which has, approximately, 89000 agencies around the world. The other is Western Union. Considered the main competitor of Money gram, it has, approximately, 170000 agencies in all the world.

If you want to see which one of them offers you a service that adjusts to your needs, you should go to their respective WebPages and check the different tariffs and rates. Once you have decided with whom you are going to work, you need to open an account. It isn't complicated; you only need a bank account or major credit card and input some basic information about you. Once they have validated all of it, you will have your account in no time.

Should I Keep A Register?

In the case you do a lot of wire transfers, maybe for your business or for personal reasons, then you could need wire transfer software. These software packages let you maintain control over the different payments you have made since you started. Of course, you could put that information in a simple book, but you won't have the option to export all that info to a spreadsheet and use it for your financial evaluations.

If you don't feel comfortable with computers, then it is recommended that to you keep a copy of any wire transfer form you fill. This document can be used in case any problem arises with the money wire transfer.

Continue to: Send Money through International Wire Transfer

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