Wire transfer
From Free net encyclopedia
A wire transfer is an electronic transfer of funds.
Wire transfers can be done by a simple bank account transfer, or by a transfer of cash at a cash office.
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History
A functioning system for transferring funds without actually moving physical cash is an important requisite for large-scale business transactions. In many cultures (ancient Persia, ancient Rome, medieval Europe) such systems have evolved independently. Typically they have been formed around a group of large merchant houses which started honouring money orders of each other's branches. One such group was the Fugger family in early modern Europe. From these system's, the giro and the check evolved as a means of transferring funds from a bank account to another.
Wire transfers were born around the telegraph companies which made it possible to wire a money order from one office to another. In some countries, postal services have carried the same role. Later, it became possible to wire money between banks, which is essentially the same process as the giro.
Wire transfer companies
One of the largest companies that offers wire transfer is Western Union (minimum of £25, $15). Its wire transfer network has caused much controversy due to the anonymity of the service.
Modern usage
In modern times, the word wire transfer or bank transfer (sometimes combined as bank wire transfer) is used for domestic or international transactions where no cash or cheque exchange is involved, but the account balance is directly (electronically) transferred from one bank account to the other. A transfer might be done to support family back home, rescue travelers in unexpected emergencies, or to pay a business expense.
Regulation
Bank transfer is the most common payment method in Europe, with several million transactions done each day. While in 2002 the European Commission has regulated the fees banks may charge between Eurozone countries down to the domestic level (see the Regulation (EC) No 2560/2001 of the European Parliament and of the Council of 19 December 2001), international wire transfers can be quite expensive.
Security features
However, wire transfer, done bank-to-bank, is considered the safest international payment method. Both account holders must have a proven identity, and there is no possibility of a chargeback. Wire transfers done through cash offices, however, are more-or-less anonymous and designed for funds transfer between persons who trust each other. It is unsafe to send money by wire for an unknown person to be collected at a cash office. The receiver of the funds may, after collecting them, simply disappear. This method of scam has been often used especially in so-called Nigerian letters.