With the rise of technological advancements, sending and receiving money is now faster, more reliable, and generally safer than ever. This is particularly true if you use a wire transfer. All things being equal, recipients can receive funds sent via domestic wire transfers in just one day. International wire transfers may take up to two business days to go through, which is still reasonable.
Overall, the convenience and security associated with wire transfers make them a popular money transfer option, though the fees can be quite high.
But why do wire transfers cost money?
Transferring money from one financial institution to another involves numerous processes and systems that cost a lot to set up and maintain. These costs are therefore passed on to customers as service fees whenever they send wire transfers. If you want a detailed breakdown of where the money you pay whenever you make a wire transfer, here’s a brief outline of the fees.
Minimum Transfer Fees
Whether you perform a domestic or international wire transfer, banks or money transfer agents will always charge you a minimum fee. As a result, you can expect to pay any amount between $25 and $35 per transaction depending on the financial platform you use in the case of domestic transfers, or between $35 and $45 or more if it’s an international wire transfer.
What’s important to note is that you have to pay minimum fees regardless of the amount you send. As such, if you want to send $50 abroad using a wire transfer, you’ll still have to pay over $30 in fees.
Handling Fees
As the term suggests, banks or other financial institutions charge customers for handling the money transfer process. Of course, handling fees for domestic wire transfers tend to be slightly cheaper than international wire transfers. That’s because the entire transfer process uses one network, which can either be Fedwire or SWIFT.
International wire transfers, on the other hand, go through multiple processes involving the original bank and foreign bank. This type of transfer also goes through the wire processing systems of both countries, making it more expensive. If your bank does not have a direct relationship with the recipient’s bank, a third intermediary bank becomes involved in the wire transfer process.
As every party involved wants a slice of the pie both you and the receiver have to pay higher service fees.
Currency Conversion Fees
Currency conversion fees are usually charged when two different currencies are involved in the wire transfer process, which is the norm for international wire transfers.
These fees may differ from one bank to the next but typically fall within a certain threshold. Financial institutions also profit from offering a lower currency exchange rate, which means your recipient would receive less money.
Other Options to Consider
All these fees begin to add up, and may leave you wondering – are there better options for transferring money?
Specialized transfers services can now offer users the ability to make transfers instantly, with low fees, and competitive exchange rates. You get all the security and convenience that making a traditional bank-based transfer gives you, without any of the additional fees, and a faster processing time.
Not to toot our own horn, but we think Cashero is pretty cool – instant transfers, high-tech security, and low fees – all upfront with no hidden costs.
Conclusion
Wire transfers are a secure, and reliable way to send money, but come with high fees.
Banks and financial institutions invest a lot of money each year to maintain their systems and keep your cash flowing through without hiccups. Network maintenance and security, human resources, rent, consumables, and other overheads all have to be covered.
On top of that, like any other business, banks need to make a profit.
As such, it’s reasonable for wire transfers to cost money. The exact amount you pay depends on the amount you want to transfer, and whether you’re making a local or international wire transfer. If your recipient uses a different currency, you should expect to lose a bit more money in currency exchange fees and lower currency exchange rates.
But reasonable doesn’t mean desirable.
Better options now exist for consumers when it comes to making transfers. Specialized transfer companies, like Cashero, can get the job done for cheaper, with greater ease and efficiency, without the need to skip on security features.
So give us a try next time you need to make a transfer, and see how easy life can be with Cashero.
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As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
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The Cashero App is now available for download in both the Apple App Store and Google Play Store, though not all features are currently functional. Cashero has not yet officially launched.
