Compared to local bank transfers, the money doesn’t flow from one bank to another, but goes through a chain of banks as there is often no direct commercial relationship between the sending and receiving bank. SWIFT enables you to make international payments in almost any currency, while USD, EUR, GBP, CNY and JPY are the top 5 currencies used by the network. The problem: SWIFT takes hefty charges, which may vary between 3-5%, depending on the location and business relationship of the sender’s and recipient’s bank. SWIFT is a secure network that can be used by banks and payment platforms to enable companies and individuals to conduct payments in most currencies. If you are a European company conducting business in the US, you most likely have already used the SWIFT network before. The term “wire transfer” is often synonymously used for the SWIFT network. In theory, it can refer to both domestic and international money transfers, but wire transfers are much more commonly used for transfers abroad, as local bank transfers are the superior options in terms of time and cost savings.
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What is a wire transfer?Ī wire transfer is an electronic transfer of money between two entities via a secure network. In this article, we are going to show you the differences and how you can profit from both processes. While bank transfers allow you to pay like a local, wire transfers require 3-5% transfer fees of the total amount.
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What’s the difference between a wire transfer and a bank transfer? At first sight, these terms sound familiar, but the cost factor is significant.