A wire transfer is an electronic transfer of funds between individuals through one or more financial institutions, often from one individual's bank account to the bank account of another person, whether domestic or international. In addition, wire transfers are commonly used to pay bills with a bank account, sometimes in the form of an electronic check. A wire transfer routing number identifies the financial agency that is conducting the electronic transfer, both sending and receiving, in the same manner as a bank account number identifies the individual sending or receiving the funds. Bank wire transfers are an efficient and secure method of sending money. There are also wire transfer companies that conduct electronic transfers for individuals who do not have bank accounts, these agencies too are identifiable by a wire transfer routing number.
Similar to a routing number on a check, this routing number identifies one bank to another when a transfer is received. Moreover, a routing number identifies the institution to which the funds will be transferred to the transferring institution. When a bank receives a wire transfer, it also receives the bank account numbers of the individuals sending and receiving the funds in order to route the funds from institution to institution, and from individual to individual.
When used for electronic bill pay, a wire transfer routing number identifies the bank and individual account to the agency receiving the payment's financial institution in order to transmit the specified funds. In most cases, both the sending and receiving institutions will charge a service fee for a wire transfer. When money is transferred between individuals, the sending individual will pay a fee to his or her bank and the receiving individual will have a fee deducted from the amount received by his or her bank. In bill pay transactions, the individual paying the bill may be charged a fee by both her or his bank and the agency receiving the payment.
Retail wire transfer companies ordinarily maintain a retail establishment to process cash into electronic funds transfers. These agencies also charge a fee for their services, and in some cases both sending and receiving individuals may be required to pay for services. Despite the seemingly instant speed of electronic transfers, most wire transfers require a certain amount of processing time, which may be several hours or several days depending on the institutions in question. Domestic transfers are normally conducted bank to bank with a wire transfer routing number, while banks generally conduct international transfers through an agency that specializes in global transfers.