Wire transfers have become a common modicum of transferring funds from one account to another within a day. With the emergence of processors such as Western Union, wire transfer has become a favored method of transaction for those who wish to quickly transfer funds from different accounts. The process sounds simply enough, but how exactly does a wire transfer work?
In the past, the issue of how to wire money was met by using telegraphs. With the blooming advances in technology and communications, wire transfers can now be conducted via online hubs, telephone or primary contact. Favored due to its high-security and low-risk of monetary transaction, wire transfers require the identity verification of both the sender and recipient. The only downside is the fee required for bank transactions, which can be rather mind-boggling if international wire transfers are involved.
In order to learn how to wire money, one must request a wire transfer to another account or third party by taking a quick trip to the bank. There are three main providers which you can utilize to initiate a wire transfer:
-Federal Reserve Banks
-Clearing House Interbank Payment System (CHIPS)
The glaring difference between these three options is the time and cost needed to process the transaction. Western Union transfers are more expensive, but their one-day-transfer efficiency rate is the optimal option if you need a speedy wire transfer. Federal Reserve Banks on the other hand, are relatively cheaper and can take up to three days to process your inquiry and complete any wire transfer transaction.
If you are concerned over how to wire money using Federal Reserve Banks, then do not be. These banks generally harbor cash reserves from miscellaneous cash pools, and are experts in circulating and clearing various modes of transactions. The CHIPS is another popular way utilized for wire transfers. With a payment system that endorses the circulation and procession of huge payment sums, CHIPS represent the final payment system in the United States that promotes highly efficient transactions at premium cost. According to the CHIPS database, a total of $1.4 trillion worth of payments is processed both nationally and globally per day.
Thus, wire transferring money is not only the most secure option, but it is also less riskier compared to other transaction avenues such as credit cards and checks, which are susceptible to theft.