Not every small business needs to do wire transfers, but those who do, tend to make transfers often. Most people know that you can make a wire transfer from a bank. They also know that banks often charge a fee for wire transfers. So, it makes sense to look for other wire transfer services that can make the transfer at a lower cost.
This website is focused on a small business’s needs. That’s why, for wire transfer services, we’ll only profile those who do B2B transfers. There are some providers that focus on P2P transfers, but, other than pointing them out, we won’t discuss any details.
Let’s start with seeing how you can get wire transfers from banks for free. Because sometimes you can.
- Some Banks Waive Wire Transfer Fees
- Some Payment Card Processors Offer Wire Transfer Services
- Money Transfer Services that Focus on Person-to-Person Transfers
- Wise Can Provide Both International and Domestic Wire Transfer Services
- OFX Focuses on International Wire Transfer Services
- Sometimes, an ACH Transfer Works Just as Well
Some Banks Waive Wire Transfer Fees
Banks often give perks to their high asset customers. One of the perks is free wire transfers.
Banks impose wire transfer fees in several different ways. Here are some activities they can charge fees:
- Incoming wire
- Outgoing domestic wire made online
- Outgoing domestic wire made with help of a banker
- Outgoing International wire made online
- Outgoing International wire made with help of a banker
- Middlemen bank transfer fees for international wires
Typically, you’d have to have a business account with a fairly high minimum balance to get the free wire transfer perk. You’ll also have to check which fees they’ll waive.
The details of what they’ll waive and how much they charge are sometimes on the bank’s website. Other times, you’ll have to dig into their Depositor’s Agreement to get the breakdown. As an example of what this looks like, here’s one from Chase, on page 13:
Additional Banking Services and Fees portion of the Chase Deposit Account Agreement
Some Payment Card Processors Offer Wire Transfer Services
Most credit and debit card processors can help you transfer a large amount of money in 1-3 days. Often, though, these are domestic ACH transfers.
We did find one processor that will provide both domestic and international wire transfer services. This processor is Stripe. You can send an invoice and be paid by wire transfer. The fee is $8/transfer.
To set up this invoicing, you’ll need to do a little coding. Stripe explains the process and gives directions here. It doesn’t seem to be the easiest process.
Another third-party processor—PayPal—also can help you make international money transfers. However, this is from PayPal account to PayPal account. It’s not a true wire transfer. The service is also expensive, so it’s really not suitable for business use.
Money Transfer Services that Focus on Person-to-Person Transfers
While researching this article, we looked into quite a few businesses that perform international and domestic money transfers. A lot of them focus on or, because of very low transfer limits, are only suitable for P2P transfers.
These businesses are:
- Western Union
- Xoom
- Remitly
- MoneyGram
We found another business that can perform B2B transfers, but you can only make the transfer with money already in the account. The company is called Payoneer.
Payoneer seems to mostly be a way to take, instead of make, payments. For example, if you’re a freelance writer, you can bill your clients through Payoneer. You can use the money your earned in your Payoneer account and pay your supplier. You cannot add money from your bank account to your Payoneer account to, for example, buy machinery you need for your business.
Because you can’t fund your Payoneer account with money from your bank account, we don’t think they’re appropriate for business use.
Fortunately, we did find two non-bank wire transfer services that are suitable for business use. They are Wise and OFX. We profile them below.
Wise Can Provide Both International and Domestic Wire Transfer Services
Wise (formerly known as Transferwise) is a company based in the UK. It helps both individuals and businesses send wire, ACH, and Wise-account-to-Wise-account transfers. You can hold money in your Wise account in 50+ currencies and send money to 80+ countries.
It’s free to open a Wise account. You pay only when you transfer money. For US-based businesses, you can transfer money domestically or internationally through Wise.
Fees for Sending a Wire Transfer
Your exact fees are calculated before every transfer. If the fees are too high on a particular day, you can delay the transfer to a later date.
As to how much you pay, it depends on several variables. The fee is cheaper if the recipient gets the money in their local currency than in US dollars. Wise’s transfer fee is percentage based, so the more you transfer, the more your fees.
But, if you transfer more than 100k British Pounds (or the equivalent in your currency), Wise lowers the percentage. The way you make the transfer—i.e wire, ACH, credit card, or debit card—also affects your final cost. Finally, the currency exchange rate can also affect your costs. Here’s Wise’s business transfer page, for more details and a pricing calculator.
There is a transfer limit. For US and as of this writing, the limit is $1M for domestic transfers and $1.6M for SWIFT transfers.
Other Fees
Your recipient doesn’t need a Wise account to receive money. The money can be sent directly to their bank account. However, there might be a charge to receive a wire transfer. In the US or if your recipient wishes to receive the money in USD, this cost is $4.14. (To receive non-wire transfers such as an ACH transfer, there is no charge.)
If you and the recipient both have Wise accounts and you transfer money between the accounts using the same currency, this is usually free. The exception is if you’re sending US dollars, Euros, or British Pounds to a country outside of the US. Then, there’s a fee.
You can usually hold money in your Wise account for free. But, if you wish to hold more than 30,000 Euros in your account, then, on the third day your account reaches or exceeds this amount, Wise will charge you 0.07% per day.
For more details, here’s Wise’s guide to sending money from the US.
OFX Focuses on International Wire Transfer Services
OFX is a money transfer company based in Australia. It is publicly traded and operates around the world. You can hold money in an OFX account in 50+ currencies and transfer money to 190+ countries.
OFX helps individuals and businesses make international money transfers. It does not help its clients with domestic money transfers.
It’s free to open an OFX account, and you can both send and receive money from this account. You can fund the account with an electronic bank transfer. If you’re in Australia, you can also fund your account with BPay. You can’t fund the account using a credit card, cash, check, or bank drafts. There is no monthly account fee for OFX to just hold your money.
OFX Transfer Fees
OFX does not charge you a transfer fee for sending money. Most of OFX’s money transfers are delivered within 24 hours. OFX doesn’t charge you a fee to receive a transfer. But, if the transfer has to go through third party banks, these bank might charge you a middleman fee.
As for money exchange rates, OFX says it offers competitive rates. You can even lock an exchange rate for up to 12 months. You can also place a limit order on a transfer—i.e. you set the exchange rate, and once the market hits that rate, OFX transfers your money.
To receive money, OFX can send money from one OFX account to another. It can also send the money to the recipient’s bank account.
If your business sends over $1M per year internationally, OFX will assign you a dedicated account specialist to help you with any issues or questions.
OFX does not impose a daily transfer limit. But some banks or even some countries (e.g. China, South Africa, South Korea) might impose transfer limits.
OFX Seems to Make Money Only from Exchange Rates
As far as we can tell, OFX makes money by moving money around and taking advantage of exchange rates. It has bank accounts in around 115 local banks around the world. When you send money and whenever possible, OFX pays out from one of its bank accounts at a local bank in the country’s currency. Your money is transferred with little to no fees, except you pay the exchange rate.
Eventually, our guess is that OFX will have to transfer money to replenish the local bank account, and it waits until the exchange rate is favorable to it before making the transfer. (We also suspect that Wise makes money this way too, but perhaps on a smaller scale because they don’t have as extensive a network as OFX.)
For more information on how OFX works, see its FAQ page.
Sometimes, an ACH Transfer Works Just as Well
When we start an article, we usually have a pretty good general idea on what the article will cover. Every once in a while, though, we’re surprised. This article surprised us a little.
We expected to find more companies that can help businesses with domestic and international wire transfer services. We were surprised to find that most money transfer companies are intended for person-to-person transfers and are not suited for business use. We’re glad to have found two good choices to present to our readers for this article.
Even though there seems to be just a few non-bank wire transfer services around, don’t forget that you can use ACH transfers to move money domestically in the US. There are many payment processors and banks that can help you with ACH transfers. The daily ACH transfer limit is up to $1M, and same-day ACH transfers are also available. While not instantaneous, they are a lot less expensive than wire transfers. With same day transfers and a high transfer limit, ACH is now definitely competitive with traditional wire transfers.
Questions? Comments?
