How to make an international wire transfer?
Last updated: 18.10.2024
We walk you through the process of making fast, secure and reliable international wire transfers.
Key takeaways
- International transfers usually involve multiple banking networks and even a currency conversion
- The transaction fees and completion time can depend on the payment provider you use and the recipient’s bank
Choose a payment provider with a low markup fee to save on transaction fees
Is your business expanding globally at a fast pace? Do you make frequent international transfers? You need to know how international wire transfers work and which payment providers can help you make cost-effective transfers.
Let’s take a look.
Table of Contents
What is an international wire transfer?
International wire transfers are a way to send money to bank accounts located in foreign countries. You can make international transfers through a bank or a reliable and secure global payment provider such as WorldFirst.
You can initiate a wire transfer online or by going to a bank branch. To make the transfer, you’ll need the recipient’s banking information, such as their account number and routing number.
The fees and completion time for a global wire transfer generally depend on your payment provider and the recipient’s bank.
How do international wire transfers work?
An international bank wire transfer usually involves multiple banking networks and even a currency conversion. Here are the steps involved in a typical international wire transfer.
(Note: This may not be applicable to all transfers)
Initiate
You start by initiating an international wire transfer to the recipient.
Make sure your payment provider or bank supports online international transfers. If your current bank doesn’t, you may have to visit the branch and submit a request. Here’s a list of the best business bank accounts in Australia that you can consider.
To initiate the transfer, you’ll have to provide the following information: (This is an approximate list. Some providers may need even more details)
- Full name and address of the recipient
- Recipient’s bank name and country
- Account number and type (savings/ current)
- Routing number, BIC, or SWIFT code
- Amount and currency of the transfer
- The reason for the transfer (This may be optional)
Interbank communication
After you initiate the transfer, your payment provider or bank will communicate with the recipient’s bank to complete it. Most banks use the Society for Worldwide Interbank Financial Telecommunications (SWIFT) network as their secure messaging system for international transfers.
Some banks may also use intermediary banks to move funds close to the recipient’s bank location. Though intermediary banks can charge their own transfer fees.
The communication process will depend on the particular payment provider you use. For instance, WorldFirst uses SWIFT GPI for cross-border transfers, improving real-time funds tracking and transparency.
Currency conversion
If the currency you’re sending is different from the recipient’s account currency, the payment provider will automatically convert funds according to their foreign exchange rates before initiating the transfer to the recipient. The currency conversion rate can include a markup. Ideally, you should look for a payment provider that offers a low markup, allowing you to protect your profit margins.
Use the currency converter on the payment provider’s website to check their current exchange rates before initiating the transaction.
Completion
When the funds reach the recipient’s bank account, they will be directly credited into the account.
How to choose the right provider for international wire transfers?
The payment provider you choose for international wire transfers will determine the transaction fee you’ll pay for each transfer and the time it takes for the transfer to be completed.
Before you select a payment provider, consider these questions.
- How quickly do you want the payment to be transferred?
Some banks may take 5-7 business days to complete the transfer, while others may be able to complete it faster. Always check the maximum time the payment provider shares before starting the transfer.
- Are you making a large transfer?
Many payment providers offer competitive conversion rates and transfer fees when making a large international transfer. For instance, WorldFirst offers custom fees to businesses with more than AUD 100,000 monthly FX volume.
- What currency are you sending the payment in?
Not all payment providers support all currencies. Review the entire list of supported currencies before signing up with a new payment provider. If your business is consistently expanding globally, it’s always a good idea to sign up with a provider that supports a large number of international currencies.
WorldFirst supports international payments in over 40+ currencies.
- How much markup is the payment provider charging?
A markup fee is an additional fee payment providers charge when converting one currency into another. Markup is the difference between the exchange rate offered by the provider and the live market rate/ interbank rate.
You can save considerably on transaction fees by choosing a payment provider with a low markup fee.
For instance, WorldFirst offers a maximum of 0.6% markup over currency conversion rates (0.8% for supplier payments on 1688.com)
- Does the recipient prefer a payment provider?
When both the sender and recipient are using the same payment provider or bank network, there is a possibility to make faster and more cost-effective international transfers.
For example, transfers between World Accounts are free and instant. So, if you already have a World Account and the recipient also has one, you can make quick payments at zero extra costs (you’re only charged a currency conversion fee in case of a cross-currency transfer).
Make secure and quick international transfers with WorldFirst
WorldFirst aims to simplify international payments and collections for online sellers, SMEs, and global businesses. With WorldFirst, businesses can make fast, secure and reliable international transfers.
You can send payments in over 40 currencies across 130+ countries and regions and receive payments for free in 20+ currencies. You can also collect and hold funds in over 15+ local currency accounts.
WorldFirst customers can decide on the exchange rate for payments and manage currency conversion risks by locking in an exchange rate with a forward contract or targeting a set rate with a firm order.
Forward contracts: Lock in an exchange rate for up to 24 months to hedge against sudden currency fluctuations
Firm orders: Set your preferred exchange rate for a currency pair. We’ll monitor the rates 24/7 and make the exchange once it hits your target so you can focus on your business rather than the market
- Open 15+ local currency accounts with local account details
- Direct CNH payments to 1688.com
- Pay suppliers, partners and staff in 40+ currencies and 130+ destinations
- Collect secure payments from 100+ marketplaces and payment gateways, including Amazon, AliExpress, Paypal and Shopify
- Lock in currency conversion rates for up to 24 months
Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.
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