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Advantages of using Bank Transfer Method Full service from specialists
Advantages of online bank transfers vs Crystal Payments and Bank Transfer
How does Online Bank Transfer Work? General Information about Bank Transfer
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General Information about Bank Transfer

Bank transfer is the payment of wealth from a person or institution to another person or institution through bank transfer or electronic bank transfer of funds from your bank account.

A payment is usually made in exchange for the provision of goods, services or both to fulfill a legal obligation made. The simplest and oldest form of payment is barter, the exchange of one’s goods or services for trade. In the modern world, common means of payment by an individual include money, cheque, debit card, credit card and bank transfer. By law, the payer is the party making a payment for purchases of services or products, while the payee is the party receiving the payment. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a major bank as one of services provided to its customers.

Wire transfer systems are intended to provide more individualized transactions than bulk payment systems such as E-Check, ACH and Check21. Different wire transfer systems and operators provide a variety of options relative to the immediacy and finality of settlement and the cost, value, and volume of transactions. Central bank wire transfer systems, such as the Federal Reserve’s FedWire system in the United States are more likely to be Real time gross settlement (RTGS) systems. RTGS systems provide the quickest availability of funds because they provide immediate "real time" and final "irrevocable" settlement by posting the gross entry against electronic accounts of the wire transfer system operator. Other systems such as CHIPS provide net settlement on a periodic basis. More immediate settlement systems tend to process higher monetary value time critical transactions have higher transaction costs, and a smaller volume of payments. Wire transfer is not the only kind of electronic transfer of funds. Most people are more likely to use Electronic Fund Transfer System (EFTS) or Automated Clearing House (ACH) transfers than bank wire transfers.

Bank to bank wire transfer is considered the safest international payment method. Each account holder must have a proven identity. Chargeback is unlikely, although wires can be recalled. Information contained in wires is transmitted securely through encrypted communications methods. The price of bank wire transfers varies greatly, depending on the bank and its location; in some countries, the fee associated with the service can be costly. Wire transfers done through cash offices are essentially anonymous and are designed for transfer between persons who trust each other. Banks collect payment for the service from the sender as well as from the recipient. The sending bank typically collects a fee separate from the funds being transferred, while the receiving bank and intermediate banks through which the transfer travels deduct fees from the money being transferred so that the recipient receives less than what the sender sent.

Bank wire transfers are often the most expedient method for transferring funds between bank accounts. A bank wire transfer is as follows:

The entity wishing to do a transfer approaches a bank and gives the bank the order to transfer a certain amount of money. IBAN and BIC codes are given as well so the bank knows where the money needs to be sent.
The sending bank transmits a message, via a secure system such as SWIFT or FedWire to the receiving bank, requesting that it effect payment according to the instructions given.
The message also includes settlement instructions. The actual transfer is not instantaneous: funds may take several hours or even days to move from the sender's account to the receiver's account.
Either the banks involved must hold a reciprocal account with each other and payment must be sent to a bank with such an account, a correspondent bank for further benefit to the ultimate recipient.

International transfers involving the United States are subject to monitoring by the Office of Foreign Assets Control (OFAC), which monitors information provided in the text of the wire to ascertain whether money is being transferred to terrorist organizations or countries or entities under sanctioned by the United States government. If a financial institution suspects that funds are being sent from or to one of these entities, it must block the transfer and freeze the funds.

SWIFT or IBAN wire transfers are not completely free of vulnerabilities. Every intermediate bank that handles a wire transaction can take a fee directly out of the wire payload the assets being transferred without the account holders knowledge or consent. In many places, there is no legislation or technical means to protect customers from this practice. If bank S is the sending bank or brokerage, and bank R is the receiving bank (or brokerage), and banks I1, I2, and I3 are intermediary banks, the client may only have a contract with bank S and/or R, but banks I1, I2, and I3 can take money from the wire without any direct arrangement with the client. Clients are sometimes taken by surprise when less money arrives at bank R. Contrast this with cheques, the amount transferred is guaranteed in full, and fees can be charged only at endpoint banks.

In Europe, however, this practice is illegal. European intermediate banks are not allowed to take a fee out of the amount being transferred, even for transatlantic transfers. European privacy law may be breached by some USA operators such as SWIFT so EU users are sometimes required by their service provider to make an explicit declaration that seeks to circumvent EU privacy regulations.

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