What is wire transfer?

A bank-to-bank transfer that usually settles the same day and cannot normally be reversed once sent, which is why exchanges release crypto bought with it quickly.

Irreversibility is the whole reason exchanges like it. A card payment can be charged back months later and an ach transfer can be returned, so an exchange accepting either has to price in the risk that the money it already converted to crypto goes away. A wire cannot be pulled back by the sender, so the exchange can credit it and let you trade immediately.

The corollary is the part people learn expensively: the same finality that protects the exchange protects nobody who sends a wire to a scammer.

How it works

A wire is a direct instruction between banks, settled through a central system rather than by netting batches. In the United States that is typically Fedwire or CHIPS, in the euro area TARGET2 for large-value payments, and internationally the SWIFT network carries the messaging while the money moves through correspondent bank relationships.

Costs come from several places. The sending bank charges a fee, often a flat amount in the tens of dollars for an international wire and less domestically. The receiving bank may charge as well. On cross-border transfers, each correspondent in the chain can deduct a fee, which is why the amount arriving is sometimes less than the amount sent and why nobody can tell you the exact figure in advance. Currency conversion, if any, carries its own margin. Exchange fee schedules state what the venue charges and cannot state what your bank and the correspondents will.

Wires also carry more compliance friction than other rails. Names must match, the purpose may be questioned, and banks in some countries decline crypto-related transfers outright.

Example

Illustrative. You send $25,000 internationally to fund an exchange account. Your bank charges $35. Two correspondent banks deduct $20 and $15. The receiving bank charges $10.

$24,920 arrives, or 0.32 percent lost to the transfer, and the exchange credits it same day so you can trade immediately. Compare the same $25,000 on a card at a typical 3 to 4 percent purchase fee, which would cost between $750 and $1,000. For large amounts the wire is dramatically cheaper. For $200 it would be absurd, since $80 of flat fees is 40 percent.

Why it matters when you buy

Payment method is usually a larger cost than the exchange's trading fee, and the ranking flips with size. Cards are convenient and expensive, bank transfers are cheap and slower, and wires are fast, final, and carry flat costs that only make sense above a few thousand dollars. The fee comparison shows what each venue charges by method, and the guide on credit card versus bank transfer sets out the tradeoffs.

Related terms

• ach transfer: the slower, reversible United States rail
• sepa: the euro area equivalent
• iban: the account identifier wires use
• fiat gateway: how the money reaches the exchange
• chargeback: the risk wires remove for the exchange
• minimum deposit: the floor that makes flat fees bearable

Questions

Why did less money arrive than I sent?

Correspondent banks in the chain deducted fees along the way. That is normal on international wires and is why the arriving amount can differ from the sent amount by tens of dollars.

How long does a wire take?

Domestic wires usually settle the same business day. International ones commonly take one to three business days depending on time zones, currency, and how many correspondents are involved.

Can I cancel a wire?

Rarely. Once sent it is generally final, and a recall depends on the receiving bank cooperating voluntarily. Treat a wire as irreversible from the moment you approve it.