As a small business owner, your cash flow management strategy needs to include a plan for time-sensitive payments.
In a crunch, payment methods like cash and paper checks are rarely practical. That's why business owners sometimes need to send money via a wire transfer.
A wire transfer is a fast and secure way to send and receive both domestic and international payments. Whether you need to pay an overseas vendor quickly or can't rely on cash for a local contractor, a business wire transfer might be exactly what you need.
What is a business wire transfer?
A business wire transfer moves money electronically from one financial institution to another. The transfer goes directly from the sender's account to the recipient's account, making it one of the fastest ways to move money between businesses.
There are two main types: domestic and international wire transfers.
A domestic wire transfer moves money from one U.S.-based financial institution to another U.S.-based financial institution. International wire transfers move money from a U.S. account to an overseas account.
Small business owners often choose wire transfers over other money transfer methods for speed and reliability. Wire transfers typically have higher transfer limits than ACH payments. Since wire transfers go directly from one account to another, they usually process more quickly than other payment methods.
Examples of business wire transfers
Small businesses use wire transfers for a variety of reasons, such as:
Purchasing business real estate
Paying overseas vendors
Buying replacement equipment
Reconciling late payments
Purchasing fast-moving inventory
Covering transactions when credit cards aren't an option
Streamlining the accounts payable process
Receiving payments from clients
How do business wire transfers work?
A wire transfer sends money electronically through a wire network. In the United States, the Federal Reserve manages the FedWire network for domestic wire transfer activity. For international wire transfers, networks like SWIFT move money across borders.
The sender provides transfer details to their financial institution to start a wire transfer. This information includes:
The sender's account number and routing number
The recipient's full name
The name of the recipient's financial institution and address
The recipient's account number and routing number
The recipient's address
The amount being transferred
Once the sender provides this information and pays for the transfer, their financial institution initiates the transaction. The sender's institution sends the wire transfer details to the recipient's institution.
The recipient's institution reviews the transaction details and transfers money from its own reserve into the recipient's account. The two institutions then settle the payment between themselves.
International wire transfers
International wire transfers typically use one of two networks: Local Network or SWIFT Network.
A Local Network wire transfer costs less to send and typically arrives faster. These transfers work well for frequent transactions and smaller amounts, though tracking options are limited.
A SWIFT Network wire transfer has higher fees and takes longer to arrive, but you can track it every step of the way using an MT103 report until it lands in your recipient's account. For more on cross-border payments, see our guide to international business payments.
Wire transfer fees
Wire transfer fees vary widely depending on your business checking accounts. Traditional banks typically charge $25 or more to send a domestic wire transfer. Some charge $15 to $50 for international wires.
Online banking platforms often charge less. Relay charges $5 to send a domestic wire transfer and $10 to send an international wire transfer. Incoming domestic wires are free.
What's the difference between ACH and wire transfers?
ACH payments and wire transfers are two different types of electronic fund transfers. Wire transfers go directly from one financial institution to another. ACH payments first pass through a clearing house network like NACHA before they reach the recipient's account.
Wire transfers typically process faster than ACH payments. Domestic wire transfers usually settle within one business day, though they can take anywhere from one to three business days. International wire transfers may take between three to seven business days.
ACH payments typically take one to three business days to process.
ACH vs wire transfer costs
Wire transfers typically cost more than ACH payments. However, costs vary depending on your financial institution.
With Relay, you can receive domestic wires for free. You can send domestic wire transfers for $5. Other banking platforms may charge anywhere from $15 to $35 or more per outgoing wire transfer.
ACH payments are used for domestic transfers and are often free to send. Keep in mind that ACH typically takes one to three business days to process.
Benefits of business wire transfers
Wire transfers give businesses a fast and secure way to send and receive payments. Here are the key benefits of wire transfer payments:
Wire transfers are fast
Since wire transfers move money directly from one institution to another, they typically process faster than other payment methods. Domestic wires often settle the same day or next business day.
Easy overseas payments
Your payment options may be limited when you send or receive an international transaction. Wire transfers work well for completing overseas payments. Wire transfers may also offer better exchange rates than other international payment methods.
Wire transfers are relatively secure
Business wire transfers are relatively secure. Since wire transfers process directly between financial institutions, there's a lower risk of fraud or error compared to traditional paper checks.
Keep in mind that wire transfers can't be reversed once they're started. Always confirm the transaction details and your account balance before you send payment.
Wire transfers are widely accepted
Wire transfers are an established payment method and most financial institutions can facilitate these payments for individuals and businesses. If you maintain separate accounts for different purposes, knowing how to manage multiple business bank accounts becomes essential when wiring funds between them.
Send and receive business wire transfers with Relay
Relay gives small business owners the ability to open up to 20 checking accounts1 with no monthly maintenance fees, overdraft fees, or minimum balance requirements. We also offer up to 50 virtual or physical debit cards2, savings accounts, percentage-based auto-transfer rules, and more.
With Relay, you can receive international and domestic wire transfers for free, and send domestic wires for as little as $5 on our Grow and Scale plans.
Open your account in minutes and start moving money the way your business needs it.
1 Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply. 2The Relay Visa® Debit Card is issued by Thread Bank, member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used anywhere Visa debit cards are accepted.
Frequently asked questions
How long does a business wire transfer take?
Domestic wire transfers typically settle within one business day, though some process the same day if sent early enough. International wire transfers take three to seven business days depending on the destination country and network used.
Can I reverse a wire transfer if I made a mistake?
No. Once a wire transfer is initiated, it cannot be reversed or canceled. Always double-check the recipient's account details and transfer amount before you send payment.
What information do I need to send a wire transfer?
You'll need your account number and routing number, the recipient's full name and address, the recipient's bank name and address, the recipient's account number and routing number, and the exact amount you're sending.
Are wire transfers safe for business payments?
Wire transfers are relatively secure because they move directly between financial institutions. However, because they're irreversible, you should verify all recipient details before sending. Never wire money to someone you don't know or trust.
What's the difference between a wire transfer and an ACH payment?
Wire transfers move funds directly from one financial institution to another and settle faster. ACH payments go through a clearing house network first and take one to three business days. Wire transfers typically cost more but process quicker.
