You can use a credit or a debit card to pay for your favorite products and services. But what if you want to transfer funds to a family member who lives in the other part of your country? In other cases, you may want to deposit or withdraw funds from an e-wallet service or transfer money from one business to another. What payment method should you use for the transaction?

We have an excellent option for you.

Featuring low costs and rapid processing times, a local bank wire is among the easiest ways to transfer money electronically.

And in this article, we will explore what a local bank wire is, how it works, the difference between domestic and international transactions, and how to use the payment method to transfer funds online.

Let's find out!

What Is a Bank Wire?

A bank wire refers to the electronic transfer of money using a financial institution's service.

To initiate the transaction, the sender needs an account at a bank and has to specify the following:

• The recipient's bank account
• The personal details of the recipient (e.g., name and address)
• The amount to transfer
• For some transfers, the recipient bank's address
• For international transactions, a SWIFT/BIC code that acts as identifiers for individual financial institutions
• In some nations, banks may request additional details from senders. For example, in the United States, users also have to specify the account type (checking or savings) as well as the recipient's routing number

Bank transfers fall into two major categories: international and local bank wire.

How Do Local Bank Wire Transfers Work?

While it lacks the involvement of intermediary financial institutions, a local bank wire transfer goes through a nation's domestic payment network without leaving its borders.

As the first step, the sender initiates the transfer via an internet banking platform or in person at a financial institution's branch. As a side note, transactions established online have reduced costs and faster processing times than their physical counterparts.

The bank then processes the transaction and sends the transfer details as well as the instructions to execute the payment to the receiving financial institution.

After the beneficiary bank approves the payment request, it follows the sender's instructions to carry out the transfer.

As soon as the transaction arrives at the recipient's account, in most cases, the bank notifies the user via an SMS or another form of message-based communications.

What Are the Costs and How Long to Wait for Local Bank Wire Transfers?

The transaction's cost and processing time vary by the transfer type as well as the technology used in the nation's banking network where the payment is carried out.

For example, in the United Kingdom, citizens can use Banker’s Automated Clearing Services (BACS) payments to transfer funds inexpensively (usually for free or at very low costs) via the nation’s domestic banking network. On the flip side, this transaction type is rather slow, taking two working days on average for the transfer to reach the recipient’s account.

Alternatively, UK citizens can select Clearing House Automated Payment System (CHAPS) transactions to speed up the process, which usually take a few hours to arrive but cost around £25 ($33) per transfer.

With the advance of technology and the increased demand for rapid payments, some countries and regions have introduced instant domestic bank wire transfers.

In 2008, the UK launched the Faster Payments Service (FPS), an instantaneous bank transfer scheme that has been increasingly adopted by financial institutions in recent years. While they feature similar costs as BACS transactions, Faster Payments reach the recipient’s account in a few seconds (even on weekends).

How Do International Wire Transfers Work?

Contrary to local bank wire, international transfers leave a nation’s borders to reach the recipient.

But that’s not the reason why cross-border transactions feature increased costs and  longer processing times than their local counterparts.

In general, the sending bank has to establish a direct connection with the receiving bank to execute a transfer.

This connection is already established in domestic payment networks, which means that local bank wire can be executed between the sending and the receiving bank without any third-parties.

On the other hand, financial institutions lack this direct connection for international transfers. While banks use the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to communicate securely, not all institutions participate in the network.

For that reason, the sending bank hires and transacts the client’s money to an intermediary (or corresponding) financial institution to connect the sender with the recipient.

If the third bank can establish this connection, it will transfer the funds to the receiving financial institution shortly (usually in 1-2 days) after receiving the money from the sending bank.

However, if the corresponding bank is unable to contact the recipient’s bank directly, it will hire a fourth financial institution to act as an intermediary. If the same is true for the fourth bank, it will transfer the funds to a fifth institution.

The more corresponding banks are involved in the chain, the longer it takes, and the more expensive it becomes to carry out an international transfer. Waiting 3-5 business days is the standard for cross-border bank wire, but it could take 1-2 weeks for some transfers to execute.

On the other hand, local bank wire either settles instantly (if the network has the appropriate technology) or takes 1-2 days on average to arrive at the recipient's account.

Since it goes through a limited number of institutions and uses a domestic banking network, local bank wire features significantly lower costs at a faster speed than its international counterpart.

How to Use a Local Bank Wire to Send Funds?

Due to the downsides of international transfers, a local bank wire is a much better option to transact funds. However, you are unable to use the payment method when your recipient is located outside your nation.

To solve this issue, you can use an e-wallet solution like STICPAY that allows customers in selected nations to deposit and withdraw funds via local bank transfers. The process goes like the following:

1. A customer in China wants to transfer funds to their relative in Indonesia. To avoid the high costs and slow processing times of international transactions, the client uses STICPAY’s local bank wire service to fund their account.
2. After the money arrives (approximately in 1-2 working days), the Chinese customer sets up an internal member-to-member transaction, which arrives at the Indonesian recipient’s STICPAY account instantly.
3. As the last step, the recipient uses the same local bank wire service as the sender to withdraw the funds in a fast and cost-efficient way.

As a result, STICPAY users can send transactions even across borders without the high costs and slow processing times of cross-border wire transfers.

To offer the local bank wire service to its customers, the award-winning e-wallet solution STICPAY has partnered with financial institutions in several countries within Asia.

In seven nations – including Indonesia, Malaysia, China, Japan, South Korea, Singapore, and the Philippines (with more countries to be added soon) –, STICPAY users can fund their accounts with domestic transfers to send money in and across borders for a competitive 1% fee via the company's internal network.

Apart from domestic bank transfers, STICPAY offers the following payment methods to its customers:

• International bank wire
• UnionPay China
• Cryptocurrency (Bitcoin, Ethereum, Litecoin)
• Visa and MasterCard (for deposits only)

Alternatively, STICPAY users can spend their balances directly at the company's merchant partners or withdraw their funds via the prepaid STIC Card.

With availability in over 190 countries, STICPAY features multi-currency accounts in 29 local currencies while supporting 19 languages.

In addition to its web platform, STICPAY has introduced a redesigned mobile app, allowing customers to make payments at the convenience of their smartphones on both iOS and Android.

STICPAY takes the safety of its users' funds seriously. For that reason, the e-wallet service uses a wide variety of anti-fraud and security measures with strict KYC and AML checks to protect customers from external threats.

STICPAY: Transfer Funds Like a Local With a Global E-Wallet Solution

Today, bank wire is one of the easiest ways to transfer funds. However, international transfers feature slow processing times and are way too expensive for many.

STICPAY solves this issue by introducing local bank wire deposits and withdrawals in selected countries (with coverage for more nations and regions to be expanded soon) for its e-wallet solution.

As a result, STICPAY users can transfer funds nationally and across borders rapidly without paying a premium for international transactions.

Sounds great, huh?

Create an account at STICPAY now!

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