Glossary · operations

Wire transfer

Also called wire, Fedwire, bank wire.

A same-day, bank-to-bank transfer that settles with finality — irreversible once credited, which is why funders use it for large disbursements and why wire fraud is unrecoverable.

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What it means

Domestic commercial wires run over Fedwire or CHIPS. RTP and FedNow are newer instant payment rails with their own operating rules, hours and value limits, and they are not the same thing as a wire even where they feel like one to the sender.

Wire versus ACH

ACH is batched, cheap and reversible within the network's return windows. A wire is processed individually, costs more, and is final on credit. That finality is the whole product. It is also the whole risk.

What governs it

UCC Article 4A for domestic commercial funds transfers, together with the security procedure in your deposit agreement. If you agreed to a commercially reasonable security procedure and the bank accepted a fraudulent payment order in good faith in compliance with it, the loss can fall on you rather than on the bank. Find out what your bank's security procedure actually is, and turn on dual authorisation if it is offered — it is the single most effective control available to a small business.

Costs and timing

An outgoing wire fee, sometimes an incoming fee, and a cutoff time after which the wire goes the next business day. Cutoffs are bank-specific and earlier in the afternoon than most people assume.

Where this one catches people

Business email compromise, and it is the one that takes whole companies out.

Someone monitors an email thread — yours, your bookkeeper's, your closing attorney's, your vendor's — and sends revised wire instructions from a lookalike domain, timed to the day the money is due to move. The wire is sent, it is final, and the funds are moved onward within hours.

The defence is procedural and dull. Never accept wire instructions, or a change to existing instructions, on the strength of an email. Call the counterparty on a number you already held, not one in the message, and read the account and routing numbers back to them digit by digit. Treat any last-minute change of instructions as fraud until it is disproved, because that is what it usually is. Banks will attempt a recall, and recalls attempted more than a business day later rarely succeed.

Separately, on the funding side: "wired today" is not "cleared today". Ask which cutoff the funder is sending against and what your own bank does with an incoming wire after its posting deadline.

Where you will meet this term

Merchant Cash Advance Working Capital Term Loan SBA Loan Equipment Financing

Read next

ACH (ACH)The bank-to-bank network that moves nearly every small-business funding payment, in both directions, on banki… Business daysDays the banking system settles, excluding weekends and federal holidays, which is the calendar every payment… Cutoff timeThe daily deadline for submitting a payment or funding instruction, after which it is processed on the next b… DisbursementThe actual movement of money at closing, whether to the business, to a vendor, or to pay off another creditor… Funding dateThe day the funder releases the money, which normally starts the clock for the first debit and for any early … Know your customer (KYC)The identity verification a financial institution performs on the individuals behind an account or transactio… Net funding amountThe exact figure that will land in your bank account after every deduction — the one number worth demanding i… Same-day ACH (SDA)An ACH option that settles on the banking day it is submitted rather than the next one, provided the file mak… Same-day fundingMoney wired to the business on the day the contract is signed, available on a narrow set of products and gate… Wire feeA charge for sending funds by wire rather than ACH, deducted from the amount disbursed so the business receiv…

Wire transfer — common questions

What does wire transfer mean?

A same-day, bank-to-bank transfer that settles with finality — irreversible once credited, which is why funders use it for large disbursements and why wire fraud is unrecoverable.

Where does wire transfer catch people out?

Business email compromise, and it is the one that takes whole companies out.

Is wire transfer the same as an interest rate?

Wire transfer is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does wire transfer apply to?

Merchant Cash Advance, Working Capital, Term Loan, SBA Loan, Equipment Financing.

Is there a worked example of wire transfer?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside wire transfer?

ACH, Business days, Cutoff time, Disbursement, Funding date.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.