International Wire Transfer: 3 Important Steps to Take

Such transfers are particularly useful if you’re looking to send larger amounts overseas, either on a one-off payment or on a regular basis, or simply want a reliable way to send money to another account.

We’ve outlined 3 important steps needed to make a wire transfer and highlighted some pitfalls to avoid along the way. 

Being aware of the different options open to you will allow you to make an informed decision that saves you time, money and stress.

There are two kinds of wire transfers—a traditional bank network transfer from one bank to another that can be done in person or online, and an electronic transfer made through a money transfer service that might require using a bank account.

To successfully transfer money online, here’s what you need to do:

Step 1: Check Information Required to Make an International Wire Transfer

No matter what method of transferring the money you choose, it will require you specific information to successfully complete the transaction. 

Most commonly, you will need the following information: 

• The recipient’s name 
• The recipient’s address
• Their account number or IBAN (International Bank Account Number)
• The SWIFT/BIC code from the recipient’s bank 
• Name and address of their bank

The account holder’s name, while not new, was previously not checked during transfers. Usually, only the bank account number and codes were checked. Now the name is included to prevent frauds.

The SWIFT/BIC code is needed to identify the bank so the money you are sending goes to the right place. It consists of 8 to 11 characters. 

It will look like this: XXXXYYZZAAA 

• XXXX: The first four characters are the bank code
• YY: 2 characters for a country code
• ZZ: 2 characters for a location code 
• AAA: Optional 3 characters for branch code

All the information you are giving the bank or the money transfer service has to coincide with the recipient’s information on the account. 

In case any information is incorrect, it will be impossible to successfully make an international wire transfer. 

Step 2: Choose The Most Convenient International Wire Transfer Method

The transfer process depends on your choice on how to wire money—in person or online. The choice is entirely up to you and your preferences.

If you’re near a bank, going there in person might be faster. If you’re already using online banking, you might choose this method if it’s supported by your bank. 

Here’s an overview of both: 

Making An International Wire Transfer In Person

Making an international wire transfer in person is a good option for those who need direct and immediate guidance from banking staff on how to wire money. 

Source: Pixabay.com

Almost all large banks can do this, although it’s a good idea to ring them beforehand to make sure. 

Here’s how to wire money in-person. 

Make sure you have the recipient’s banking information

Since you won’t be at home, within a close range of all your important documents and information, you’ll need to make sure you prepare everything in advance and bring it with you.

This includes, among other things, the recipient’s banking information. 

Answer the required questions and verify your identity

The bank teller will ask you a few questions, including the currency you’d like to wire the money in and the amount you are transferring. 

You should bring some proof of ID—such as your passport or driving license—in case you need to confirm your identity. Most banks will not let you do an international wire transfer without an ID.

Agree on the transfer fee

You will need to pay an international wire transfer fee to the attendant. Sometimes the recipient’s bank will also charge a processing fee, and the bank teller will be able to tell you whether that’s the case or not. 

The fees are quite different from one bank to another, ranging anywhere between $0 and $50.

Some banks will have a percentage of the amount you wish to transfer if you’re paying in foreign currency instead of a flat fee. While this is great for smaller amounts, it can be quite a lot for larger transfers. 

You’ll have to agree to pay the fee once you’re in the bank. If the fee is just too much for you, don’t be afraid to look elsewhere if the bank’s rates are a lot more than what you bargained for. 

Ask how long the transfer will take

Once the bank teller has completed the wire transfer process on their end, ask them how long the transfer will take and when they expect the recipient to receive the funds. 

Most banks will give an estimate of a couple of business days, which is the usual expected amount for an international wire transfer. 

Save all receipts

You will get a receipt for the transfer, which might have a Federal Reference number. This number makes it possible to trace or recall the transfer. 

While there is no way to get an automatic confirmation that the recipient received your transfer, the Federal Reference number can be used to initiate a trace by the bank.

By tracing the transfer, they will immediately see if the amount is already on the recipient’s account or not.

Using Online or Mobile Banking to Make an International Wire Transfer

Instead of going to the bank to make an international wire transfer, you might want to look into options on how to wire money online through your bank. 

The benefits?

It’s generally faster, more convenient, and you can do it all from home. 

Source: Pixabay

If you use online or mobile banking services, here’s how you can make an international wire transfer from the convenience of your home or while you’re on the go:

Log in to your online bank account

Log in to your bank’s online services with a username and token or password, depending on the bank, either by using a computer or through your mobile banking app on your phone.

Navigate to the international wire transfer option. Most commonly, it will be located right next to domestic transfers. 

If you have never used this option before, you might need to make a few additional steps that will be included below.

Set a limit to your wire transfers

Before you can use the online option to wire money, you might need to set a limit. This limit will tell the bank how much money you can transfer before the bank will require additional authorization from you. 

It’s a precaution to minimize the risk of fraud.

If you will be going over this limit, you will need to authorize the international wire transfer first. This will involve a simple set of steps where you confirm your ID and the amount you want to send.

If the funds you want to transfer are below your set transfer limit, there should be no issues with the transfer. 

Enter the recipient’s information

Make sure you have the recipient’s information outlined in step 1 ready to save you running around when it’s time to make the transfer. 

Ensure all the information is correct, and pay attention to put in a correct SWIFT/BIC code so the money reaches the right bank.

Most banks have an inactivity timer which automatically logs you out when you haven’t been online for a certain amount of time, which would mean you’d have to start the process from scratch.

Enter the transfer amount and currency

Enter the desired amount you wish to transfer. 

The currency usually appears automatically after entering the recipient’s information. In case you need to change it, you can simply choose the correct one from a drop-down menu. 

Check exchange rates

It’s worth being aware of exchange rates and setting yourself a benchmark in advance. 

That way you’ll be able to know whether or not you’re being offered a good deal, and shopping around if you need to.

Pay the necessary transfer fee

As with in-person transfers, most banks will charge a fee for an online international wire transfer, following the same rules: it will either be a flat fee or a percentage of the amount and depend on the currency you choose. 

The recipient’s bank might charge a processing fee as well. It may be useful to find out how much this would be before making the transaction.

This is usually paid by the recipient, but getting a figure in advance will prevent surprises.

You might want to look for banks that offer a transfer service with no fees.

Most commonly, the no-fee service is available for transfers to their overseas branch, not other banks. 

Check the status of your transfer

Most services will take a couple of business days for your wire transfers to go through, but there should be an estimate given at the end of your online session.

While waiting for the wire transfer to go through, you can log back into your account to check the status and see if there have been any updates. 

Once complete, you’ll receive a message to say the transfer has been made.

Most major banks do provide online services that cover an international wire transfer too. Usually, you’ll find guides or FAQs on your bank’s site that outline how to wire money online through them. 

If you’re not familiar with the process or are having trouble with some of the steps, give your bank a call so they can assist you.

Using External Services For An International Wire Transfer 

If you’re looking to save money when making your international wire transfer and are concerned about your bank’s fees, consider using an outside service. 

There are online alternatives such as PayPal or Revuto that will charge lower (or no) fees when compared to others. With them, you can also do direct transfers from the bank account, or choose to do it over a direct debit card. 

Although the transfer may take more time to go through, the rates are usually considerably lower than through a bank—not just for the transfer fees, but in terms of currency exchange rates. 

Some FinTech money transfer companies even offer transfers for free, so it’s worth shopping around.

International money transfer services can be used for making one-off or regular payments. If you’re looking to make a deposit for a foreign property, you may need to send a larger amount to cover the cost.

Whatever your requirements, there are increasing numbers of challenger banks and digital banking services popping up, looking to make the international transfer process as efficient and personalized as possible. 

Step 3: Keep an Eye on Exchange Rates and Margins

While transfer fees are a big headache for anyone looking on how to wire money, there’s another fee that is not as obvious or so openly disclosed—the exchange rate. 

Before deciding whether or not an exchange rate is reasonable, it’s a good idea to do some research and give yourself a good benchmark.

Exchange rates differ greatly between banks, money transfer services, and digital banking options. 

For example, if you wish to transfer 1000GBP to USD, the mid-market rate is 1.293.

According to this, the recipient would receive $1,293. 

Yet, with most services the recipient receives less. Why? 

Because either the mid-market rate is skewed, or a margin is added to the mid-market rate. 

• Banks will always look for a way to make a profit on the exchange rate, meaning you will rarely get a good mid-market rate with bank transfers. Challenger banks will also skew the mid-market rate, but not as much as established banks.
• Money transfer services will have a set margin, usually as a percentage. Paypal, for example, uses the mid-market range from their bank and adds a 2.5% margin to it.
• Digital banking services often don’t put any margins on their rates or only minimal margins and use the actual mid-market rate.

This is particularly important if you’re going to be transferring funds on a regular basis, as these rates can really take a lot from your transfer. 

So instead of receiving $1,293, the recipient got $1,233. That’s a $60 fee, hidden right in the exchange rate.

With such margins and skewed rates, you have to be smart about how to wire money and minimize their impact, especially if you’ll be transferring money regularly. 

Ways to Get a Good Exchange Rate

When you transfer at a current exchange rate, it’s also known as a “spot deal,” it’s the simplest and fastest option, although not always the most economical. The funds clear at the current exchange rate, but this means the recipient will get less money. 

To minimize this, you can do two things: 

#1 Limit Order – in this instance, you’ll set your ideal exchange rate, and when this rate is reached, your funds will be transferred. This is a cost-effective method, but not a particularly fast one. 

#2 Forward contract – a forward contract enables you to lock-in the current exchange rate while scheduling your international wire transfer for a scheduled date in the future. This can often be any time up to 12 months ahead.

There are lots of options out there to make an international wire transfer with many advertising the best rates and no fees. 

But remember: if it looks a little too good to be true—it probably is.

Get Smart About Your International Wire Transfer Options

No matter which of the above methods you go with, be smart about it. Know all the information you need and find out which type of international wire transfer will have the least amount of fees. 

Ensure all the paperwork and receipts from the international wire transfer is safely stored in case something goes wrong.

That way you can feel safe in the knowledge that your wire transfer can always be traced and recalled if needed.