Banking
What is Wire Transfer?
A wire transfer moves money electronically from one bank to another. It’s fast and secure, often used for large or urgent payments. Wire transfers offer near-instantaneous finality and settlement, making them the preferred method for high-value transactions like real estate closings. Under CFPB remittance rules, consumers are protected by specific disclosure requirements regarding fees and exchange rates for international wires.
Because wire transfers are settled in real time, they are irreversible once completed. This finality makes them a common target for financial fraud, requiring banks to implement strict identity verification procedures before processing transactions.
Quick Facts
PRACTICAL EXAMPLE
A home buyer executes a $100,000 domestic wire transfer from their bank to a title company to cover closing costs. The transfer clears within two hours, allowing the transaction to close on the same day without waiting for a check to clear.
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