Wire transfers are more common than you may think. The name "wire transfer" can be misleading in this day and age. At one time, they meant transactions that were conducted through such services as Western Union, but not anymore. Today, wire transfers take place all the time, whether we know that they are happening with our transactions or not.
In basic terms, a wire transfer is simply the electronic transfer of money. Wire transfers can take place with virtually any size entity. Banks will often transfer huge sums of money between themselves via wire, even though no actual cash is being moved. The accounting procedures for these types of transaction are all electronic. This is a very secure way to move large amounts of money.
Wire transfers are also used for such transactions as credit card balance transfers. Again, there is no actual cash money moved during this process. Transferring money from your savings account into your checking account is a wire transfer. Most people have used an ATM card to purchase something and that is a wire transfer as well. When you pass your ATM card through the machine at the retailer, you are authorizing a wire transfer to take place. In essence, this allows funds to be moved from your account into the account of the vendor.
A wire transfer may or may not be free to the consumer. Some Point of Sale (POS) transactions may cost you a small fee to complete. Other types of transactions may cost nothing to complete.
Another type of wire transfer is when you sign up for automatic bill paying through your bank. This type of bill paying is becoming more popular as technology makes it easier and safer to use. Many utility companies, such as your water, electric, and phone, use automatic bill paying as a means of collecting their payments. As long as you are relatively sure that the funds will be in your account on the date they are accessed by the billing company this can be a good way to pay bills without having the hassles of mailing them off.
The downside to automatic payments is that the money has to be in your account or the bill will not process through. This can lead to confusion and possible cut off of services if you do not monitor your bank account closely.
Lastly, you can still use the wire transfer services of third-party companies such as Western Union. This can be very useful if you need to send money to someone who does not have a bank account or is not able to receive funds in a more traditional way. There are, of course, fees associated with these types of wire transfers and those fees are usually based on the amount of money that is being sent.
A good place to learn more about wire transfers and how they help you is at your local bank. They can assist you in setting up various transfer plans if you wish to do so. They can also explain to you the safety and security features of wire transfers.
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