How did wire transfer services first come about
The process of money transfer generally indicates to one of these methods which are the cashless mode of money transfer:
- Electronic funds transfer, which is a system of card to bank transfer.
- Wire transfer, it is an international bank to bank transfer of money. It’s a fast-international money transfer
- Giro, this sometimes stands for direct deposit.
- The rest may include older methods like money order, postal cheque and other methods.
- Remittance, this is a way by which any individual working in any country abroad can send money to their country.
A very famous mode among them is the wire transfer mode. This is a mode of transferring money from one country to another. Due to its international viability, it is very famous mode of money transfer. But not everyone knows about them despite the fact that everyone may have heard about them. Therefore, to know about them we answer the very common questions on wire transfer.
What is a ‘Wire Transfer’?
Wire transfer is a sort of electronic transfer of money or rather funds across a network which is administered by various banks all around this world. It is a very fast-international money transfer method. Wire transfers is a method that allows the transfer of money from individuals to other individuals, while keeping up the efficiencies that are associated with fast and secure transfer of money. Wire transfer is something which allows people in different countries to safely transfer money to various places around the world.
On breaking ‘Wire Transfer’ down
A wire transfer is something of a method which is used to move money from a financial institution or a bank to another financial institution or a bank. When these are done on the US soil then these are transfers regarding remittance or under that category under U.S. law. But since the advent of this method and regular usage this has come to be a transfer of money from one person another. It became a very fast-international money transfer method.
When we are talking about the wire transfer then there is no transfer of physical money that is done between the banks and accounts. In the actual method the information regarding the person receiving the money, his bank account into which the money is to be transferred and the amount of money that is to transferred is passed on between the banks handling those transactions. When we go for the non-bank wire transfers there are times when they do not require bank account numbers.
The person going up for the wire transfer method of the money transfer pays for the transaction at his bank and then the process is initiated in which the bank of the recipient receives all the information as to how much money transferred and who transferred the money and it uses its reserve money to come up with the money at that moment and then the two banking units involved settle that transference of money on the back end. This is the reason why there is no physical transfer of moneys made during a wire transfer.
The very first incidents recorded regarding the widely used service for wire transfers are of 1872 in which the service was launched by Western Union. This method used to run on its still existing telegraph network. With the careful and calculated usage of passwords and code books, a telegraph guy in some office could send or wire money that the person asking for the transfer has paid at the office by means of sending a telegraph to another telegraph office where the money has to be paid to the receiving customer. By the year of 1877 this service was used to move a large sum of about $2.5 million each year. As the very beginning of this method was due to the telegraph in many countries they are still called telegraphic transfers.