A wire transfer is when money is transferred electronically from one place to another, usually through a money transfer service like Western Union, MoneyGram, and Xoom.
It’s used for international payments or sending money to family, relatives, and friends abroad. It’s also when a sender sends money from a bank account going through a wire transfer service, and the receiver gets the money in cash by going to the partner sites of the wire transfer service used by the sender, or the money goes directly to the receiver’s bank account.
There many advantages of wire transfers but there are also some disadvantages. Here are the pros and cons.
Pros
Convenient
Wire transfer services are found all over the world. This means you can send and receive money from anywhere. You don’t even have to go out of your house just to send money because you can do it online. You may wire funds from your bank account to another bank account through wire transfer services. You can also find multiple wire transfer service centers in every city, so you don’t have to look far and wide. They are very accessible and available, and the best part is you get your money in your own currency.
Fast
Wired money is sent and received real time. This means you can send the money while the receiver is waiting for it at the same time from across the globe. Once you are done with the transfer, the receiver will be able to claim the money right away. Unlike sending money through bank deposit, there is a clearing period of a couple of days depending on the bank policy.
Global service
The receiver doesn’t have to go far to receive the wire transfer. Global wire transfer services have many branches where one can go to collect money. Some wire transfer centers are also tied up with various banks. Just check which service the sender used to send the money so that you’ll know where you can get your remittance. Because the transaction is almost always cleared real time, you don’t have to wait long to receive your money.
Safe
Generally, it is safe to do wire transfers. There are regulations for international wire transfers that all wire transfer services follow. You can thus be sure that safety procedures are being practiced so your money can safely reach its beneficiary.
Cons
Fees
All wire transfer services charge fees for each transaction. Usually, the sender is the one paying for the charge, and the receiver will be able to get the whole amount that was sent. But some services still require a minimal fee from the receiver or a small percentage of the money received. International transfers usually cost more compared to local transfers.
Nonreversible
Once a transfer is made, it’s nonreversible. The sender will not be able to get the money back in case he changes his mind. This is risky especially when the transaction is made for paying something, and you don’t personally know the receiver.
Attractive for scammers
Because transfers can be made anonymously and only transaction codes or tracking numbers are required to claim the money, money wire transfer is very attractive to scammers.
For instance, there is a circulating email about a Nigerian Prince inheriting a big amount of money, but he cannot get the funds and need help with wire transfer or something like that. Then, if someone gets lured by the story and is tempted by the percentage share of the amount, he or she will be asked to wire a certain amount to someone who will be processing the transaction because the prince will not be able to do any transactions himself. If you send the money, it’s game over! This scam has been around for many years and, surprisingly, it continues to deceive people until now!
International wire transfer is widely used these days because of its convenience and speed of transaction. You can send as much money as you want; you just need to pay its equivalent service fee. However, in any transaction involving money, you have to be very vigilant and cautious. Never send money to anyone who you don’t personally know. If you encounter emails or text messages asking you to help them with a particular problem involving money, do some investigation first. Research or look for blogs with the same scenario. There is a 99% chance that it is a scam. No one would ever reach out to strangers and entrust millions of dollars without a vested interest. Anything or anyone asking for money will be more likely to be bogus.
Wire transfers are excellent tools to send and receive money easily and conveniently. It’s a very helpful technology that will continue to rise and improve in the coming years. Take note of the pros and cons above and follow all security and safety steps for a successful and safe money wire transfer.