Different wire transfer systems and operators provide a variety of options relative to the immediacy and finality of settlement and the cost, value, and volume of transactions.
This is because they post the gross (complete) entry against electronic accounts of the wire transfer system operator.
The first widely used service for wire transfers was launched by Western Union in 1872 on its existing telegraph network.
The fees and processing times can vary depending on the service provider and the destination country.
As of 2022, most European banks do not charge private customers for SEPA transfers, apart from possible exchange fees.
[5] Prior to this, in 2002 the European Union relegated the regulation of fees a bank may charge for payments in euro between EU member states down to the domestic level,[6] resulting in very low or no fees for electronic transfers within the Eurozone.
However, this regulation was superseded by the Single Euro Payments Area (SEPA), consisting of 32 European countries.
In the United States, domestic wire transfers are governed by Federal Regulation J[7] and by Article 4A of the Uniform Commercial Code.
Cheaper alternatives to the banks are available from foreign exchange brokers, who usually charge a lower fee and/or margin.
International transfers involving the United States are subject to monitoring by the Office of Foreign Assets Control (OFAC), which monitors information provided in the text of the wire and then decides whether, according to the US Government's federal regulations[7][8] and political positions, money is being transferred to terrorist groups, or countries or entities under sanction by the United States government.
[citation needed] However, it is still common practice for a European brokerage firm to state that they charge no transfer fee, and then contact their bank to take an unpublished fee from the amount transferred as a means to compensate their bank with their clients' assets.
[15] Many of these specialised brokerage houses can transfer money at better exchange rates compared to banks, thus saving up to 4%.
For example, in the UK, even though such companies are regulated by the Financial Conduct Authority, not all of them fall under (FCA) scrutiny.
[18] Regulators include the Australian Securities and Investments Commission (ASIC), the Financial Transactions Reports Analysis Centre of Canada (FINTRAC) in Canada, the Hong Kong Customs and Excise Department in Hong Kong and the Financial Conduct Authority (FCA) in the UK.
SWIFT deviates slightly from the standard, though, by using position nine for a Logical Terminal ID, making its extended codes 12 digits long.
Transmitting and receiving US banks are uniquely identified by their ABA routing transit number.
There are of course restrictions, but this is the way people often set up automatic bill payment with utility companies, for example.