Thousands upon thousands of cash transfers happen daily between countries as customers move small amounts of money. The most common tend to be those working in one country and sending money to family and relatives back home. These small amounts, sent bi-weekly or monthly, sustain local communities and economies where what’s earned in a country like the U.S. by one person can pay for an entire family’s well-being in another country. However, these are generally small amounts. When it comes to large money transfers, a wire transfer is the preferred method for full safety.
The Technical Nature of a Wire Transfer
Traditionally, a wire transfer is a movement of funds electronically from one bank institution to another. Ergo, it’s also known as a “bank wire” as well. Funds are, between banks, moved from one account to another bank account, matched by routing and account numbers. The same method is how money is moved when a check is cashed. It essentially tells a bank to use a stated routing number and account, draw down a set amount, and deposit it into the specified deposit account. However, a wire transfer can move large amounts of money either internally within the same country or internationally and between different banks.
The actual movement for the majority of bank wires goes through the Society for Worldwide Interbank Finance or SWIFT. This system is shared by thousands of banks and regulated by government financial systems. Some 200 countries and 11,000 different banks are involved, providing the backbone of the global financial system for decades before the Internet arrived.
Money Transfer Providers are Included Too
Banks are not the only institutions capable of wire transfers. Ria International Money Transfer and similar providers can also handle and provide wire transfers for large amounts, making movement convenient and safe for customers transferring funds internationally. However, why use a transfer provider at all versus a bank? One of the big reasons is cost. Banks will charge anywhere from 3 to 5 percent of the wire amount in fees, and that’s in addition to the cost of exchanging between currencies and those related fees.
Worse, the more banks involved in the movement, the more fees.
Banks also have imposed wire limits. In the U.S., for example, large amount wires are capped, varying on the type of customer and bank account. Basic customer accounts can be as small as $1,000 or $5,000 and business accounts can be as much as hundreds of thousands. Essentially, the more deposited, the higher the permission.
Far More Flexibility With Money Transfer Providers
Unlike banks, money transfer providers focus on customer needs. So, they will transfer large amounts securely as long as their fees are covered. That includes currency exchange to the destination currency. However, their fees are far less than traditional banks and the wire transfers move faster as well. Finally, wire transfers can be initiated online as well as in person with trusted providers. Many of the well-established services can handle transactions of as much as $1 million as well as multiple transfers versus just one per day or week. No surprise, international money transfer providers definitely draw a lot of attention from fee-conscious customers who don’t care to share their money more than necessary.
Competition Produces Better Services
Remember, banks seem convenient because they have been in the business of wire transfers for decades. That said, they are not the only game in town. Competition and the Internet make it very possible and safe for alternative options to exist. That said, it also leaves room for a lot of fly-by-night operations too. So, to be safe, if you are going to use an international money transfer provider versus a bank, work with a well-established vendor like Ria Money Transfer or similar. You won’t be disappointed.