Emily Clarke

Are Wire Transfers Safe?

These days, you have many ways to send money. From using apps on your smartphone to online banking services, you have several options. However, one method of moving money remains popular.

We're talking about wire transfers.

How Does a Wire Transfer Work?

Simply put, a wire transfer is a process of electronically transferring money from one bank to another. It gets its name from the old-school telegraph wires banks had to use to initiate transfers. Today, it's much simpler. Banks communicate using trusted networks like the Fedwire Funds Service or Society for Worldwide Interbank Financial Communications (SWIFT). The latter is often used for global wire transfers from a sender in one country to a recipient in another.

Initiating a wire transfer is relatively easy. You can do it through your bank or a nonbank provider like Western Union or MoneyGram. There's also the option to initiate the transfer online. Either way, you must have the recipient's name, bank account number, and routing number. Of course, you'll also have to provide the amount of money you want to transfer. Depending on the institute that facilitates the transfer, you may have to offer your personal details, too.

Banks set limits on how much you can send during a wire transfer at one time. All banks must report transfers over $10,000 to the Financial Crimes Enforcement Network (FinCEN). However, some may report transfers below that threshold if they notice suspicious activity.

The Safety of Wire Transfers

For the most part, wire transfers are safe. They're a much safer alternative than sending checks through the mail. That's partially why they remain a popular option for sending money across state or international borders. It also helps that money gets to recipients relatively quickly compared to traditional bank transfers.

All that said, wire transfers do come with risks. They're popular among scam artists because you cannot cancel or reverse transfers after initiating them. The exception is global wire transfers. There's a 30-minute window to cancel an international transfer. Even still, exercising caution and being vigilant when sending wire transfers is critical.

Author Resource:-

Emily Clarke writes about multiple payment platforms, payouts API, marketplace payouts and more. You can find her thoughts at API tools blog.