An electronic transfer of funds between banks—used for sending money quickly and securely, especially across international borders or for large transactions.
What is a Wire Transfer?
A Wire Transfer is a method of electronically sending money from one bank account to another, either domestically or internationally. It’s a widely used payment method for businesses that need to move funds quickly and securely—especially for large transactions, vendor payments, or cross-border transfers. For non-U.S. residents managing U.S. companies, wire transfers are often essential for injecting capital into the business, paying international partners, or receiving payments from overseas clients.
In the U.S., domestic wire transfers are typically processed through the Fedwire or Clearing House Interbank Payments System (CHIPS), and they usually settle the same business day. International wires (also called SWIFT transfers) are processed through the global SWIFT network and can take 1–5 business days depending on the banks involved, the currencies used, and whether intermediary banks are required.
Wire transfers are not the same as ACH transfers. While ACH is common for low-cost, recurring domestic payments (like payroll or subscription charges), wire transfers are faster and designed for one-time, high-value, or time-sensitive payments. However, they come with higher fees—both for the sender and sometimes the recipient—and they are irreversible once sent.
To initiate a wire transfer, your bank will typically require the recipient’s full name, bank name, routing number (for domestic), or SWIFT/BIC code and IBAN (for international), along with the account number and the amount to be sent. Many banks also require you to verify the request through multi-factor authentication or secure portals, particularly for international wires.
For non-U.S. founders, wire transfers are often used to fund a U.S. company from a foreign personal or business account. When sending wires into the U.S., it’s important to ensure the wire memo or reference includes the company name or purpose, as this helps identify the incoming funds—especially if the transfer is going to a shared business address or third-party bank.
In summary, a wire transfer is a fast, secure way to move funds between banks. For U.S. companies owned by non-residents, wire transfers are a key financial tool used for capital contributions, supplier payments, and international transactions—making it essential to understand how they work and ensure details are submitted accurately to avoid delays or loss of funds.
