International Wire Transfer
Definition
An electronic transfer of funds between banks in different countries, typically using the SWIFT network, with higher fees and longer processing times than domestic transfers.
International wire transfers move money between banks across borders using the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network. Unlike domestic transfers that settle through ACH in 1-2 days, international wires can take 1-5 business days and involve multiple intermediary banks.
The cost structure includes: sending bank fees ($25-$50), intermediary bank fees ($15-$30 per intermediary, sometimes deducted from the transfer amount), receiving bank fees ($10-$25), and the exchange rate spread. The exchange rate markup is often the largest hidden cost — banks typically add 1-3% to the mid-market rate, which on a $10,000 transfer means $100-$300 in hidden fees.
The SWIFT network works by routing messages through a chain of correspondent banks. A transfer from a US bank to a small bank in Southeast Asia might pass through 2-3 intermediary banks, each potentially charging fees and adding processing time. This correspondent banking model is why international transfers are slow and expensive.
Alternatives to traditional wire transfers have emerged: Wise (formerly TransferWise) offers mid-market exchange rates with transparent fees, crypto transfers using stablecoins can settle in minutes with minimal fees, and services like OFX and Remitly target specific corridors with better rates than banks.
For regular international transfers (supporting family abroad, paying international contractors), comparing the total cost including exchange rate spread is essential. The cheapest option varies by currency pair, amount, and corridor. Crypto-based transfers are increasingly competitive for large amounts, though they require both parties to be comfortable with the technology.
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Frequently Asked Questions
What's the cheapest way to send money internationally?
For most corridors, services like Wise offer the best combination of fair exchange rates and low fees. For large amounts, OFX or currency brokers may offer better rates. Stablecoin transfers (USDC, USDT) are very cheap but require crypto wallets on both ends. Banks are typically the most expensive option.
Why do international wire transfers take so long?
International wires route through multiple banks via the SWIFT network. Each bank processes the transfer during business hours in its time zone. Weekend and holiday processing gaps add delays. Compliance checks (anti-money laundering) at intermediary banks can add further delays.