The wire is an electronic fund transfer from one person to another or an entity. A Wire transfer is also called bank transfer or telegraphic transfer is a method of transferring funds in electronic mode. Funds are transferred from one bank account to another bank account online through Electronic Fund Transfer or through a transfer of cash at a cash counter. A traditional wire transfer is between one bank into another bank using a network of SWIFT (Society for Worldwide Interbank Financial Telecommunication) or Fedwire.
Different wire transfer systems and operators provide different options for settlement, cost, value, and volumes of transactions. The wire transfer system such as the FedWire system is the Real-Time Gross Settlement System (RTGS). RTGS provides the quickest availability of funds as it is a real-time and irrevocable settlement. This system allows faster
How does Electronic Fund Transfer happen?
Money transfer providers such as banks and non-banking institutions can provide the facility of sending wire transfers. Before we discuss the wire transfer it is important to note that a wire transfer is an irrevocable and a cash-based transaction. Do not send funds through wire transfer to anyone whom you do not know well. The following is the method to transfer funds through the wire.
- Collect wire transfer information
- Costs of transfer
- Fill the form
- Save the receipt
Step 1. Collect the wire transfer information
If you are transferring funds from your bank account you should have online account access and government-issued ID, typically your Emirates ID or your passport. The account should be funded with money that you want to transfer.
Other information such as
- Recipient’s full name along with contact details
- Recipient’s bank account name, address and contact details
- Recipient’s bank transit number/routing number/ABA Number
- Recipient’s bank account details
As per the bank’s instructions, additional information may be required. Information about the intermediary bank, the recipient’s bank uses for international transfers.
If you do not have access to online banking, you can approach the bank and they will assist you. Non-Banking institutions also wire the funds, they may not require bank account information but they will require recipients details such as name and address.
Non-Banking institutions such as MoneyGram, western union, Ria money transfer, and others provide a simplified solution of fund transfers. You need to have the below details for transferring funds.
- Emirates Id/Passport
- Recipient’s full name and address
- As per requirement, any additional information requested.
Step 2. Costs of the transfer
Find out the cost of the transfer of funds through the wire. Your bank or non-banking institution may allow you to transfer wire in several ways. This can be done through online transfer, telephone banking, or at the bank branch office. Before transferring, compare prices and decide the method of transfer can vary.
The charges for transferring money through telegraphic transfer are different for domestic and international transfers. Contact your transfer agent/bank and find out the cost of the transfer. You can ask about the transfer fees, details about the exchange rate, taxes collected by all the parties, and the amount expected to be transferred excluding the fees. This enables you to arrange the additional amount for the transfer of funds.
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Step 3. Fill out the form
You have to be very careful while filling the transfer form, whether you are transferring through an online or through an agent or through a bank transfer. Be precise in filling out the transfer form, any misspelt words or missing digits or missing numbers can prevent rejection of your transaction. Your mistake can prevent the recipient from getting money.
Step 4. Save the receipt
Once the transfer is processed a tracking number is generated and Banks or non-banking financial institutions issue this number as confirmation to the customer.
This transaction number is used as a reference to find out if the funding is successfully processed or not. After the transaction is completed, you will be issued a receipt. This receipt can be used by the sender to check the funds have been received or not. The transfer of funds through wire takes just a couple of minutes. It takes more time for international transfers, you can track the status using the tracking number.
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Wire Transfer in UAE
Around 75% of the expats in the UAE avail wire transfer facility when they are making money transfers in the UAE. Expats send money abroad through any of the 125 money exchange or cash houses available in the UAE. These money exchanges happen through the well-known way SWIFT or on international wire transfer companies such as MoneyGram or Western Union.
Across the UAE, exchange houses are located at various places including shopping malls. Companies such as Al Ansari Exchange, UAE exchange, Wall st Exchange, Al Fardan Exchange, Al Rostamani exchange, Lulu exchange, and other companies offer better deals than banks.
Making the transfer of funds in the UAE through exchange companies is the best and fastest method.
You can make international money transfers in the UAE using your credit card. The time taken for delivery of funds is longer, it may take up to 5 working days. There are certain services such as MoneyGram and Western Union by using debit cards or credit cards they process the fund transfer quickly.
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Advantages of Wire transfer
- There is no bank hold placed on money received through wire transfers.
- There is less risk of fraud in sending and receiving the funds through wire transfers.
- The processing time is very less, it only takes a few minutes to transfer funds and credit into the recipient’s account. International transfers may take a day or two.
- You can avoid delays or cancelation by calling the recipient and verify wiring instructions with the bank or transferring agent.
- Wire transfers can be reversed in certain circumstances if the recipient is in agreement with the sender.
The transfer of funds through the wire is fast and safe, depending on the country where the money is sent to, the time may vary. It is always a best practice to contact the bank or exchange house exactly when the recipient will receive the money. If all the things are good, you can expect the transaction to complete immediately in a few minutes when you are using online services. It may take up to 5 – 7 business days for traditional banking transactions.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.