Whether you’re paying a supplier overseas or sending funds between company accounts, wire transfers are one of the most widely used methods for moving money — especially for large or time-sensitive payments.
But what exactly is a wire transfer, how does it work, and what are the risks, fees, and alternatives businesses should know about?
In this guide, we’ll unpack the meaning of a wire transfer, explain the process step-by-step, and share practical tips for businesses in Australia and beyond looking to send or receive money safely and efficiently.
What Is a Wire Transfer?
A wire transfer is an electronic method of sending money directly from one bank or financial institution to another. Unlike payment apps or card networks, wire transfers move funds securely through a global banking infrastructure, often the SWIFT or Fedwire network, making them ideal for large transactions or international payments.
When you initiate a wire transfer, your bank “wires” the funds to the recipient’s bank, along with identifying details like account number, bank code, and payment reference.
There are two main types:
- Domestic wire transfer: Money sent between two banks within the same country. In Australia, these usually settle within the same business day.
- International wire transfer: Funds sent across borders. These can take 1–5 business days and may involve multiple intermediary banks to process currency conversions.
For businesses, wire transfers are typically used for paying overseas vendors, sending large deposits, or finalising real estate or equipment purchases. They’re valued for speed and security, though not always for cost.
How Does a Wire Transfer Work?
The process might sound complex, but it follows a clear sequence. Here’s what happens behind the scenes:
1. The Sender Authorises the Payment
Every wire transfer begins with the sender. You provide your bank or payment platform with:
- Recipient’s full name and address
- Bank name and address
- Recipient’s BSB (Bank State Branch) and account number (for Australian transfers)
- For international wires: SWIFT/BIC code or IBAN (depending on destination)
- Transfer amount and currency
- Purpose or invoice reference
Once submitted, the bank verifies the sender’s authorisation and ensures there are enough funds to complete the transaction.
2. The Business Sets the Amount and Currency
For international transfers, you can choose to send the payment in either your local currency (AUD) or the recipient’s currency.
Each choice affects costs:
- Sending in AUD may involve currency conversion on the recipient’s end.
- Sending in the recipient’s currency often provides more control over exchange rates but may include conversion fees up front.
This is where understanding your provider’s wire transfer fees and exchange rate margins becomes crucial.
3. The Payment Network Processes the Transfer
After authorisation, your bank sends the payment through a secure network.
- Domestic wire transfers in Australia use internal banking systems (e.g., BECS, Osko, or RTGS).
- International wire transfers typically travel through the SWIFT network — a system linking over 11,000 banks worldwide.
Each bank involved verifies the transaction, deducts or adds intermediary fees if applicable, and forwards it to the next institution until it reaches the recipient’s account.
Settlement can take anywhere from a few hours to several days, depending on the destination country, time zones, and banking cut-off times.
4. The Receiving Bank Credits the Funds
Once the recipient’s bank receives the wire, it confirms the details and deposits the funds into the designated account.
For domestic wires, this often happens the same day.
For international wires, it can take longer — typically 1–5 business days — especially if intermediary banks are involved or currency conversion is required.
Wire Transfer Fees, Costs & Timeframes
While wire transfers are fast and secure, they’re not always cheap.
Domestic Wires typically cost $5-25 AUD with same business day processing.
International Wires typically cost $10-50+ AUD with 1-5 business day processing and may include intermediary bank fees.
The Foreign Exchange Margin is typically a 0.5-3% fee on top as well.
Hidden Costs:
- Exchange rate spreads: Banks often add 2–3% to the real mid-market rate.
- Receiving fees: The recipient’s bank may deduct a small charge before depositing funds.
- Resend or correction fees: If account details are wrong, some banks charge to amend or return the payment.
Timeframes:
- Domestic transfers: often complete within hours.
- International transfers: 1-3 business days on average, up to 5 for certain regions or currencies.
Pro tip: For regular or smaller payments (like vendor invoices or retainer clients), consider automated ACH or EFT options instead; these are slower but much cheaper.
Common Risks
Wire transfers are reliable, but not risk-free. Because they’re designed for speed and finality, they’re difficult to reverse once sent.
Common risks include:
- Fraud or phishing: Scammers may impersonate vendors and supply fake bank details.
- Human error: Typos in account or SWIFT numbers can misdirect funds.
- Irreversibility: Once the payment leaves your account, it’s often impossible to recover without the recipient’s cooperation.
If you’re paying small amounts frequently or managing recurring client payments, wire transfers can quickly become costly and inefficient.
Wire Transfers for Businesses: When They Make Sense
Wire transfers are best suited for:
- High-value purchases (equipment, property, or deposits)
- International payments to suppliers or contractors
- Urgent transfers that can’t wait for standard processing times
They are not ideal for:
- Small recurring payments or subscriptions
- Domestic invoices under a few hundred dollars
- Situations where you may need to reverse or adjust a transaction later
In other words, use wire transfers when speed and certainty matter more than cost, and automation when efficiency matters most.
Want To Talk Payment Acceptance?
Wire transfers have been around for more than a century, and they remain one of the most trusted and secure ways to move money between accounts, especially for large or international payments.
But today, businesses need more than just one way to get paid. The way customers pay has evolved, and so have the technologies behind it. From cards and direct debit to recurring payments and integrated accounting — modern businesses need flexible, fast, and reliable systems that keep cash flow moving.
If you’re ready to make payments simpler, faster, and smarter, our team can show you how Venue Smart’s payment acceptance solutions can transform how your business handles money.
Book a demo by chatting with a local representative today.
Start accepting payments the smart way, and focus on growing your business, not chasing invoices.