A wire transfer is an electronic bank-to-bank transfer that processes in near-real-time through Fedwire (domestic) or SWIFT (international). Faster and more final than ACH — but costs $25-50 for outgoing domestic wires. Used for large, time-sensitive, or international payments.
Wire transfers are the most direct form of electronic payment: the sending bank debits the sender's account and initiates a Fedwire message to the Federal Reserve, which credits the receiving bank in real time. Domestic wires sent before the 5:00-6:00 PM ET Fedwire closing window typically arrive the same business day, often within the hour. There is no NACHA batch processing — wires are individual, real-time instructions. Key characteristics: (1) Irrevocable — once sent and received, wire transfers cannot be reversed without the recipient's cooperation. This is why wire fraud is so damaging — funds are gone immediately. (2) Costly — outgoing domestic wires typically $25-50 per transfer; incoming wires $10-25; international wires $35-80+ plus correspondent bank fees and exchange rate spreads. (3) Finality — wire funds are considered immediately available (good funds); ACH is subject to a 2-business-day hold at most banks before full availability is guaranteed. For business lending: (1) SBA 504 loan closings typically disburse via wire transfer. (2) Real estate closings require wire for settlement funds. (3) Equipment purchases from dealers requiring immediate good funds. (4) International supplier payments in USD or foreign currency. (5) Large contract payments where ACH finality isn't acceptable to the recipient. Wire fraud is the largest-dollar fraud category in business banking. The FBI IC3 reports (https://www.ic3.gov) that Business Email Compromise (BEC) — where fraudsters impersonate executives or vendors to redirect wire payments — results in billions of dollars of annual losses. Businesses should verify all wire instructions by phone before sending. The Federal Reserve operates Fedwire Funds Service (https://www.frbservices.org/financial-services/fednow-fedwire/). The FedNow instant payment service (launched July 2023) is a competing real-time payment rail with lower fees.
Domestic wires sent before the Fedwire closing window (typically 5:00-6:00 PM ET) arrive the same business day, often within 30-60 minutes of being sent. Wires sent after the closing window are queued for the next business day. International wires typically take 1-3 business days depending on currency, destination country, and correspondent banking chains.
Not easily. Once the receiving bank accepts the wire, it is final. Reversals require the recipient's voluntary cooperation. If you send a wire to the wrong account or fall victim to wire fraud, contact your bank immediately to initiate a wire reversal request — but success depends on the receiving bank's cooperation and whether the funds have been moved. This is why pre-verification of wire instructions is critical.
ACH processes in batches through the NACHA network, settling in 1-3 business days (or same-day with Same-Day ACH), costs pennies to cents per transaction, and can be reversed under certain conditions. Wires process individually and in real-time through Fedwire, settle the same day, cost $25-50 per outgoing transfer, and are effectively irrevocable once received. Use ACH for routine business payments; use wire for time-sensitive, large, or international payments.