Comparing Wire Transfers and Electronic Transfers

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Today, there may be many different reasons why you may need to transfer funds to another account. This can be either just a gift or financial assistance, payment for any purchase or utilities. Transferring directly to a bank account, including a free online account, offers a number of advantages over conventional money transfer methods. After all, you won’t need to stand in line at the bank. In addition, this is a reliable and secure process, which implies complete protection of your personal banking data. Below we will analyze the features and differences between wire transfers and transfers in electronic systems.

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Wire and electronic transfers: concepts, differences and main foundations of operation

An interbank transfer involves transferring money from one account to another. Banking institutions act as intermediaries in this operation. Such processes vary depending on their cost (fee charged) and the timing of the operation. Interbank transactions can be represented by several options.

  1. Wire money transfer from account to account. For this, online platforms are used that work not only through an Internet browser, but also as a mobile application. The process is completed in a matter of minutes, as funds are transferred directly from your account to the recipient’s account. To do this, you only need to know the recipient’s card number, his first and last name. When transferring money abroad in this way, a commission may sometimes be charged. The platform is supported 24 hours a day.
  2. Electronic bank transfer involves transferring funds directly from your nearest bank branch or post office. This is especially true for those for whom the world of digital technologies and online banking is a very confusing technology. For such a transfer, it is important to provide not only the recipient’s bank details, but also your own. The money will be credited to the recipient’s account within a few days.

Money transfers from international payment systems were created as an alternative to transfers through bank accounts. Their advantage is that sending and crediting a transfer does not require more than 10 minutes of time, while bill payments take longer and require a reason for making it. On the other hand, if you are paying for a contract, that is, legal entity bills, then bank payment through an account will be the only right solution for you. The amount of commission for bank payments is fixed and does not depend on the size of the payment, but depends on the conditions of a particular banking institution. The term for crediting to the recipientєs account is usually no more than 3-5 banking days.

  1. Wire transfer is a non-cash form of payment for services, which consists of making a payment by the Payer to the Recipient. Payment can be made in several ways, the most popular of which is electronic transfer, which allows you to quickly and efficiently transfer funds.

Wire bank transfers are nothing more than a system of electronic notifications about transactions debiting from the sender’s bank account and crediting the specified amount of any fund assets to the recipient’s bank account. The main difference between bank transfers is their territoriality and the speed of cash turnover. In the system of relations between banks, the speed of a bank transfer depends on several other processes, and more precisely on the time and quality of work of processing centers.

The payer draws up a special payment document that gives the owner of the cash account the right to instruct the bank regarding the non-cash transfer of funds to a particular client of another bank. This document must be accepted for execution. The bank cannot refuse a client a transaction if the sender’s account has monetary assets that allow the transaction to be completed. When drawing up an executable document, it is necessary to indicate the details of individuals and legal entities participating in the bank transfer process.

When making a bank transfer, you should carefully check all your identification data and try not to lose the details issued by the bank, because In case of incorrect or incomplete indication of even one detail, the financial institution may refuse the transaction and require the Payer to provide correct information.

During the process of making a bank transfer, the amount of funds in the payer’s account decreases exactly as much as it increases in the recipient’s account. In addition, the bank may require the customer to pay a fee based on the type of service provided and the amount of monetary assets being transferred from one location to another.

  1. Electronic transfer is a transfer by one person of funds to another private person, usually through some special money transfer system and without opening a bank account. Money transfer systems provide a distinct alternative to traditional payment through banks. The client comes to a business-structure or bank that is a member of the money transfer system, fills out an application, deposits money through the cash register and receives the original code. It must be communicated to the recipient. Owning the code, a person can receive the sent amount anywhere in the world where the company has a branch. As a rule, money transfer systems have a wide network of representative offices, distinguishing them from traditional credit institutions.

In order to use the money transfer system, it is necessary, firstly, to select those that have branches in the city where the money is expected to be received. And secondly, compare transaction fees, since they can vary significantly. The price for the simplicity and accessibility of the money transfer system is its higher cost compared to traditional payments between banks, which on average ranges from 2% to 6% of the amount.

So, the process is quite simple and often looks like this.

  1. The sender starts a session with the Internet bank and indicates the recipient, the amount to be sent, as well as a secret question and the answer to it. Funds are written off instantly, usually along with a commission.
  2. The sender forwards the answer to the security question to the recipient using another communication method to secure the transfer.
  3. The recipient is then sent an email or SMS with instructions on how to receive the fund and provide an answer to the question.
  4. The recipient must answer the security question correctly. The recipient is given a certain number of attempts to answer the question correctly, after which, if the correct answer is not given, the funds are returned to the sender.

The transfer must also be received within the specified time limit, otherwise it will not be processed. This period depends on the specific bank and (or) parameters set by the sender.

In some cases, you don’t need to have a bank account to transfer money online (or even receive it this way). You can use a credit card or cash instead, but the fees may be higher.

To send cash through a bank office, you do not need to open an account there. All you need to do is come to the office with your passport and fill out an application for transfer. In the application, the sender indicates the name and details of the bank where the money should arrive, as well as the surname, first name, patronymic of the addressee and his passport details. The recipient will be given the money at the bank’s cash desk. An option is possible when you send cash at a branch, and the money arrives in the recipient’s bank account. In this case, instead of the recipient’s passport data, you must indicate his account number. Online transfers are available in your personal account on the bank’s website or in its mobile application. You can transfer money from card to card or from account to account.

There are many ways to transfer money from one account to another. There is no universal way to transfer funds, since everything depends on individual conditions and partnership agreements, as well as the goals of the sender and recipient. Deciding which option to choose depends on the transaction amount and the terms and conditions of each individual bank.

Our specialists will help you choose the most optimal and profitable transfer method, and will also tell you about the nuances of other options. We direct all our efforts to achieve the most effective, profitable and long-term results for you.

Article’s author is Denys Chernyshov – founder and CEO of the globally-famous organization Eternity Law International.

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