A bank wire transfer is an electronic payment sent directly between bank accounts. Here’s how it works, what it costs, and
how it compares to ACH.
• A bank wire transfer is an electronic payment that moves money directly from one bank account to another, with no physical cash involved. Banks send secure instructions to each other through networks like SWIFT (international) or Fedwire (domestic), and the receiving bank credits the funds to the recipient.
• Wire transfers are common for real estate closings, supplier payments, and international transactions, since they’re fast and hard to reverse once sent.
How It Works
• You give your bank the recipient’s account and routing (or SWIFT) details.
• Your bank verifies the funds and sends secure instructions to the recipient’s bank.
• The recipient’s bank credits the account, often the same business day for domestic wires.
What It Costs
• Domestic wires: typically $15 to $35.
• International wires: typically $35 to $50, plus a foreign exchange markup of 2 to 5 percent that isn’t always disclosed separately.
Wire vs. ACH
ACH is cheaper and fine for routine payments like payroll, but takes one to three business days. A wire costs more but settles same-day and is largely irrevocable, making it the standard for large or urgent payments.
The Bottom Line
A wire transfer is fast and secure, but the flat fee plus FX markup adds up quickly for businesses that pay suppliers internationally on a regular basis, which is why many are now looking at faster, lower-cost alternatives built for cross-border payments.
Kavodax orchestrates cross-border payments across regulated stablecoin rails, settling in under 60 seconds with transparent pricing. See how it compares to a traditional wire.