International Wire Transfer: How Wire Transfer Work & Fees

If you are looking to make an international wire transfer to a bank account abroad, this guide will help you understand the associated wire fees, the process, and how international wire transfers work behind the scene. We will offer viable alternatives to banks, that will enable you to make foreign wire transfers without any upfront wire fees per transfer, using the best foreign exchange rates possible.

Let’s start off with the basics and explain how SWIFT wire transfers work.

How International Wire Transfers Work via SWIFT

What is the underlying mechanics of international wires/payments? What is the similarity between International Wire Transfers and Icebergs? For both, you only see a minor part compared to what is below the surface. Whenever you want make a wire transaction to a bank abroad, you actually make an order with your bank (or alternative provider) indicating where you want the money sent to and wait for it to arrive.

SWIFT, standing for the Society for Worldwide Interbank Financial Telecommunication, is a system that enables banks to securely send international messages to each other, implement international wire transfer instructions (MT202) and process the fund transfer (MT103). SWIFT has been an integrated component of any international wire transfer operation for the last 30 years allowing banks to effectively communicate. One main drawback of this system is that it is not free of charge and it usually embeds fixed fees (around $10 per transfer). The international wire fees levied by the SWIFT system on banks are rolled over to the customer.

Wire fees with banks that use SWIFT transfers

As per the above, the SWIFT protocol is expensive to use, and banks across the globe ALWAYS charge a fixed fee per each you are sending an international wire transfer, with a price tag ranging between £10-£40in the UK, $8-$30 AUD in Australia (other than CitiBank), and $10-$50 in the U.S. Below you can find a list of banks and their costs per a single wire transaction.

U.S Bank Wire Fees for Sending a Wire to a Bank Account Abroad

BankInternational Wire Transfer Fixed Fee (Max)
Bank of America$45
Wells FargoUndisclosed
PNC Bank$45
US Bank$50

As per survey conducted on Dec 2020, we do not commit to the accuracy of the above international wire fees

UK Bank Wire Fees for Sending a Wire to a Bank Account Abroad

BankInternational Wire Transfer Fixed Fee (Max)
Barclays £40
NatWest £15
Lloyds £9.50
Metro Bank£25
TSB £20
RBS £15
Santander £25
The Co-operative Bank £25
Virgin Bank£25

As per survey conducted on Dec 2020, we do not commit to the accuracy of the above international wire fees

Australian Bank Wire Fees for Sending a Wire to a Bank Account Abroad

BankInternational Wire Transfer Fixed Fee (Max)
Westpac$20 AUD
ING Direct$0-$15 depending on transfer size
CitibankNo fees

As per survey conducted on Dec 2020, we do not commit to the accuracy of the above international wire fees

How to Avoid SWIFT Wire Transfer Fees?

There are bank-alternative providers who we believe can beat the above banks wire transfer fees, as well as providing a significantly better wire transfer fees. This is in fact the main thing we research and investigate here on Money Transfer Comparison.

How do they do that, considering that we mentioned earlier in this article that SWIFT transfers cost banks $10 per transaction?

  1. Dedicated money transfer companies have wholesale exchange rates. They buy currencies in huge volumes, and roll over the discount to the customer. They are more efficient than banks, have a better online money transfer platform and international money transfer apps (as compared to online banking systems) and just don’t have as many expenses and overheads as bank, allowing them to remain profitable even at much lower exchange rate markups than banks.
  2. These providers tend to NOT use the SWIFT protocol for international wire transfers; instead, they debit and credit their own bank accounts in different countries, as per the diagram below:


Similarly to a bank wire transfer, to use such a service for sending money abroad, you have to:

  • Register with the provider and pass through its KYC process.
  • Provide documentation about the source of the money and the reason for the overseas wire (per demand).
  • Know the details of your recipient i.e. know your recipient’s bank account number (IBAN, bank identifier number, and other bank details).

To discover a list of apt alternatives to overseas wire transfers with banks please review the below list

Please be aware that transferring funds with such services is limited to international money transfers. Domestic wire transfers are not supported by these financial institutions.

Additional Disadvantages to the SWIFT Wire System

With SWIFT wire transfer protocol having had total domination of the market, the lack of competition has potentially lead to other inefficiencies too – with payment delivery times of almost all currency pairs remaining the same for many years, and one of the worst things about sending international wire overseas – recipient bank fees. Recipient bank fees happen when there’s a need for an intermediary bank on a wire transfer because two banks don’t have a direct relationship, as per the diagram below:

Each one of those arrow represent another bank that take a change of fees, making the international wire more expensive than it was set out to be, and potentially leaving the recipient with less money than anticipated.

Basically, if you are a client of bank ABC and you want to send $10 to a client (your friend Joe) of the same bank, things will be very straightforward. Bank ABC will just debit your account by $10 and credit Joe’s account by $10. There will be actually no physical movement of money and in most cases, fees will be quasi-null. Now, in case Joe is not a client of bank ABC. Let’s assume that Joe is a client of bank XYZ. In case there is an existing relationship and agreement between your banks, the flow will work in the following way:

  1. Bank ABC will debit your account by $10
  2. Bank ABC will credit bank XYZ account by $10
  3. Bank XYZ will credit Joe’s account by $10

Obviously, there being an existing agreement means that Bank ABC has an account in bank XYZ and vice versa. In this particular case, there will be fees applied anytime there is a new credit or debit operation.

Now, in case of banks ABC and XYZ have no direct relationship, or it is an international payment and your bank doesn’t have the capabilities to clear the destination currency of your choice, there will be a need for a third party or fourth party correspondent bank. Let’s assume that Bank ABC and XYZ each have a direct relationship with bank TUV. The process will get more complex and will involve more fees and transactions as follows:

  1. Bank ABC will debit your account by $10
  2. Bank ABC will credit bank TUV’s account by $10
  3. Bank TUV will credit bank XYZ’s account by $10
  4. Bank XYZ will credit Joe’s account by $10

So this process can get more complex, particularly in more exotic countries. For this reason, transfers between major banks can usually be done at minor costs, while transfers to remotely located smaller banks involve more fees.


Cyber-threats on SWIFT

Additionally, like any technological system, SWIFT can still be prone to attacks. The SWIFT system of Bangladesh was hacked in 2015. It appears the country was using second-hand switches with no firewall in place. The theft yielded the hackers with a billion dollars.

Are SWIFT Transfers Safe?

SWIFT transfers are safe in a sense that the money won’t get lost from one end to another end, but it can be unsafe in a way that it’s a payment method which is difficult to reverse. In fact we wrote an entire guide on the topic of whether bank transfers are safe, and our conclusion that they are but with some limitations and aren’t always the best way to make payment. The same and more goes for international wires, sending money to a stranger abroad is normally ill-advised.

Concluding Words – Slashing Fees on International Wires

We believe that we have explained extensively how international wire transfers work, and why it is recommended to, at the very least, consider to send money abroad through international money transfer services and not banks. Foreign currency transactions can end up being very costly if you are using a bank that charges you $20 in wire transfer fees per transfer, especially if you are a business that constantly pays suppliers abroad, or an expat which constantly moves balance between two bank accounts. Those $20 can end up being $40 per wire if there are intermediately banks involved in the process, and then to a lot more when you factor in the exchange rate spreads added by the bank.

There are other advantages to sidestepping your bank when it comes to international transfer online. A specialist foreign exchange service would be able to provide guidance on the best time to exchange the funds (which could be done prior to when you have to actually send the wire), supply foreign exchange hedging, rate alerts and essentially provide a much more tailored service which comes in handy especially if you are looking to send a large wire transfer abroad.