What is a Wire Transfer? Fees, Duration and How to Make One [UK]

If you need to send a payment to someone - particularly internationally - you may have been asked to send a wire transfer, or to simply wire them some money. But what exactly is a wire transfer, and what does it mean to wire money?

The phrase wire transfer is very commonly used in the US and internationally - and refers to what we’d more likely simply call a bank transfer here in the UK. Wire transfers are usually processed instantly and so are commonly used by UK highstreet banks for high value or international payments, in place of the normal domestic options like BACS and CHAPS transfers.

While wire transfers have some great features, they can be slow and pricey to set up. This guide covers all you need to know - plus some wire transfer alternatives that can be much cheaper, faster, and easier to use like Wise, OFX, and Western Union.

Wire transfer comparison

Before getting started, let’s compare the costs and delivery times to send a bank transfer with a few UK banks compared to specialist providers.

To paint a picture we’ll look at an example payment of 1,000 GBP to a friend in the US, to be deposited into their bank account in US dollars:

• Fees and rates correct at time of research, 24th November 2022

As you can see in this worked example, the amount your recipient gets in the end can vary pretty widely - with specialist services coming out consistently ahead of traditional banks. Often the main fee you pay when sending money overseas is actually rolled into the exchange rate used to convert your funds from pounds to the currency you need - which means you’ll need to compare both the transfer fees and exchange rates available to be able to see exactly how much your transfer will cost in the end.

What is a wire transfer

A wire transfer is more likely to be simply called a bank transfer here in the UK. It’s different to some other payment methods like BACS in that it’ll usually start to be processed by your bank instantly when you initiate it. That can mean it’s more suitable for higher value and time critical payments.

Wire transfers in general terms are electronic transfers of money from one account to another. When you make a wire payment you’ll need to have the recipient’s banking information including their account number, which is then used to move your money to the receiving institution safely. Depending on where your money is headed and how the banks and service providers involved process the payment, there may be several intermediaries involved in getting your payment where it needs to be.

Money transfers can be sent between banks, or through online providers such as Wise, OFX, and Remitly.

What are the types of wire transfer?

There are two main types of wire transfers you’re likely to come across:

1. domestic payments made to UK bank accounts in GBP

2. international transfers which can be processed in a range of currencies to most countries around the world

1. Domestic wire transfers in the UK

If you’re sending a payment from your UK bank to someone else in the UK and you need to get the money moving fast, you may be able to send a domestic money transfer. These payments are usually deposited on the same day they’re sent. To make this type of payment you’ll need the recipient’s UK banking details, including their name, account number and sort code.

2. International wire transfers

If you need to send money to another country or currency you’ll probably be directed by your bank to use an international wire or bank transfer. International wires are normally processed through the SWIFT network - so when you send your payment you’ll need the recipient’s banking information, plus a SWIFT/BIC code which is a unique identifier used by banks around the world to make sure international transfers land in the right place in the end.

Other types of wire transfer

There are other types of electronic fund transfers (EFTs) you may come across when you’re arranging a payment. Here are a couple of other common options in the UK:

BACS, CHAPS and Faster Payments 

BACS, CHAPS and Faster Payments can all be used to send payments within the UK. The difference between these payment types comes down to the delivery speed - and often the costs involved, too. BACS payments may take a day or two to arrive, CHAPS transfers are usually deposited on the same day they’re sent, and Faster Payments can arrive pretty much instantly. All of these options are usually only available for payments in GBP, and not all banks offer all of these services.

Peer to Peer transfers 

To send a fast local payment you don’t necessarily need a bank - you might also choose an alternative like PayPal for a peer to peer transfer. This type of payment is sent from your provider account to another account from the same provider (PayPal to PayPal for example), and can be fast and cheap if you’re not sending money internationally. However, fees vary by platform, and can be pretty steep if any currency conversion is needed.

Are wire transfers safe?

Wire transfers are generally considered to be safe. You’ll need to take common sense precautions to avoid problems and fraud - but as transfer service providers are regulated globally they’ll usually have to follow strict safety guidelines and rules. Make sure you’re sending with a recognised and regulated service and consider these further pointers to avoid issues, fraud and scams:

• Check and double check you have the correct banking information for the recipient - you may not be able to reverse or cancel a payment once it’s on its way

• If you’re asked to make a payment you don’t understand or recognise, ask for more information or just say no

• Be wary about clicking through on links embedded into emails or messages, in case they take you to fraudulent payment sites

• If something sounds too good to be true it probably is - keep up to date with common scams so you’re not a victim

If you’re unlucky enough to be a victim of financial crime you’ll need to report it to the provider or bank, and the police, as soon as possible.

Wire transfer fees

A wire transfer can be one of the more expensive ways to send money, especially through regular banks. As well as the bank’s upfront transfer fees you may run into a few other costs - here’s what you may end up paying:

• Your own bank’s transfer fee

• An exchange rate markup

• Third party costs paid to intermediaries

Bank wire transfer fees do vary widely, and you may find that some banks - like those we looked at in our comparison earlier - waive the transfer fee entirely. However, that doesn't mean you’re getting a free service - the costs are simply added to the exchange rate applied instead in the form of a markup. Using an exchange rate markup is extremely common, but it makes it hard to pick apart the real costs of your payment, and pushes up the price overall.

Exchange rate markups vary by provider and currency, but can often be around 3%. This doesn’t sound like a lot, but it does quickly mount up. Here’s how a 3% markup would add up over a few different transfer values:

• Sending 1,000 GBP - the exchange rate markup adds 30 GBP to the total

• Sending 5,000 GBP - the exchange rate markup adds 150 GBP to the total

• Sending 50,000 GBP - the exchange rate markup adds 1,500 GBP to the total

Of the providers we looked at earlier only one - Wise - used an upfront transfer fee and the mid-market exchange rate. All of the other featured providers had no transfer fee - but used a charge added into the exchange rate applied. Here’s how that worked out on our example transfer -

Sending 1,000 GBP to EUR - amount the recipient gets, split out by provider:

Wise - 1,136.60 EUR

OFX - 1,128.94 EUR

RBS - 1,093.03 EUR

Advantages and Disadvantages of Wire Transfers

Although wire transfers offer a convenient way to send money and pay bills, they might incur high fees and take a considerable amount of time to settle, especially when sending money to other countries. Here are some of the pros and cons to consider if you’re not sure if a wire transfer will work for your payment:

Wire transfers pros

• Can often be arranged online or by phone with your regular bank or a specialist service

• Depending on the destination and provider wires may arrive very quickly

• Wires can be sent globally in pretty much any currency

Wire transfer cons

• Overall fees are often high, and may involve third party fees paid to intermediaries

• Exchange rates can include a markup which makes fees difficult to calculate

Alternatives to wire transfers

Wire transfers along with other forms of EFT are convenient and safe when compared to the old school options of sending a cheque or handing over cash when you had a bill to pay. However, wire payments with banks can be pricey and may still take a few days to be deposited.

To solve this problem, modern digital services have emerged which let you send money at home and abroad online or from your phone. Providers such as Wise, OFX and Remitly support payments to a broad range of currencies and countries which may have more flexibility and lower fees compared to your normal bank:

• Wise - uses the mid-market exchange rate for all payments, which can beat banks and alternative providers

• OFX - no transfer fees apply to most payments, and exchange rate markups are smaller than those often used by banks

• Remitly - send money on Economy or Express routes depending on the urgency and the fees you’re willing to pay - with payout options including cash collection if required

How to send a wire transfer

If you’re sending a wire with your normal bank you may be able to do so using the online or mobile banking service, by phone, or by visiting a branch. Online and digital specialist services offer local and international transfers you can make from your phone or other smart device, or by logging into your laptop.

If you’re setting up your payment digitally the typical steps include:

• Log into your online banking

• Navigate to the payments section

• Follow the prompts to add the currency and amount you want to send

• Check the rates and fees

• Enter your recipient’s details

• Confirm and your payment will be on its way

What information do you need to make a wire transfer?

Exactly what you need will depend on your bank and where you’re sending money to - usually it’ll include:

• The recipient’s full name and address

• The recipient’s bank name and address

• The recipient’s bank account number or International Bank Account Number (IBAN)

• For UK payments you’ll need a sort code, and for international transfers a SWIFT/BIC code

How long does a wire transfer take

Domestic wires in the UK will usually arrive on the same day they’re sent. For international wires the delivery time can be a bit more varied, depending on your provider’s processes, the destination country, and how the recipient’s own bank handles the transfer. Specialist services can usually give you a delivery estimate before you confirm the transfer - and can also often offer a fast delivery time. Payments may even be instant.

Bank payments which pass through the SWIFT network are likely to take 3 - 5 days for some destination countries.

Here’s a reminder of the anticipated delivery times for wire payments made with a few of the providers we looked at earlier:

Wise - 50%+ of payments are instant, 90% arrive in 24 hours

OFX - 1 - 2 days

RBS - SWIFT payments may take 3 - 5 days

Wire transfer limits

Banks and specialist providers set their own limits for wire transfers, which can include caps on the amount you can send per transaction, per day, per week or per month for example. You’ll need to double check the applicable limits with your preferred bank or provider before you get started to make sure there are no surprises once you initiate the transfer.

It’s also worth noting that banks and financial service providers in the UK and around the world do need to check and verify payments from time to time to comply with anti money laundering legislation, and to ensure accounts are not fraudulently or illegally used. As a result of this, higher value payments in particular may mean showing your provider or bank more documentation to verify the source of the income and where the money is headed.

Can you cancel a wire transfer?

A wire transfer generally can't be cancelled once it's been received, so you’ll want to double check all the details are correct and make sure you know the person you’re sending money to before you confirm your transfer.

Conclusion

Wire transfers - also called bank transfers in the UK - are available through banks and specialist providers, both domestically and internationally. If you need to send money to someone you may think your bank is the natural place to turn. However, banks may have relatively slow processing times and higher fees compared to some specialist services.

Alternative providers like Wise for example offer better exchange rates and more transparent fees compared to banks, while services like Remitly and Western Union can provide fast transfers to bank accounts, for cash collection, and a range of alternative payout options. Compare a few different options before you set up your payment to make sure you get the best deal.