Wire Transfer
A wire transfer is an electronic funds transfer that moves money directly between bank accounts — domestically through the Fedwire or CHIPS networks, and internationally through the SWIFT messaging network — typically settling the same day or next business day.
Wire transfers are the primary method for moving large sums of money between financial institutions quickly and securely. Unlike checks or ACH transfers, wires are generally irrevocable once sent — the recipient receives guaranteed, immediately available funds, which is why wires are used for large commercial transactions, real estate closings, securities settlements, and time-sensitive payments.
In the United States, domestic wires settle through one of two main networks. The Federal Reserve's Fedwire Funds Service is a real-time gross settlement (RTGS) system operated by the Fed that processes approximately $4 trillion in transfers per business day, including large-value interbank payments and securities settlements. The Clearing House Interbank Payments System (CHIPS), a private network operated by The Clearing House, handles a large volume of high-value dollar payments, including the U.S. dollar leg of many international transactions, and uses a netting mechanism that reduces the total liquidity required.
International wire transfers typically rely on the SWIFT network — which transmits standardized payment messages between financial institutions worldwide — in conjunction with correspondent banking relationships that allow banks without direct account relationships to move money through intermediaries.
From a regulatory standpoint, wire transfers are subject to the Treasury's Bank Secrecy Act Funds Transfer Rule (the Travel Rule), which requires financial institutions to collect and transmit identifying information about the sender and recipient for transfers of $3,000 or more. This requirement is a key AML tool designed to create an auditable trail for large fund movements. FinCEN has also extended Travel Rule concepts to virtual asset service providers handling cryptocurrency transfers above similar thresholds.
For fraud prevention, wire transfers are high-risk because their speed and irrevocability make them a favored vehicle for business email compromise (BEC) scams, in which fraudsters impersonate executives or vendors to divert legitimate payments to attacker-controlled accounts.