Western Union
One of the largest companies that offers wire transfer is Western Union (minimum of £25 in the UK, or $15 in the US). Western Union began in 1851 in Rochester, New York, and became the preeminent telegraph transfer service. It also introduced Telex, which was a predecessor of today's wire transfer services and is still used by some banks and business entites. Initially based in the United States, the company expanded operations internationally in 1989. [5].Western Union is a stand-alone entity and is not affiliated with a financial institution. Individuals who transfer or receive money with Western Union do not need to have an account with Western Union, or any financial institution. Instead, transfer instructions are sent into a central system, and the recipient can pick up the funds at a Western Union office in their area. Western Union transfers can also be initiated online. [6]
Concern and controversy about Western Union transfers has increased in recent years, due to the increased monitoring of money laundering transactions, as well as concern about terrorist groups using the service, particularly in the wake of 9/11. Although Western Union keeps information about senders and receivers, some transactions can essentially be done anonymously (ie, the receiver is not always obligated to show identification.) [7]
Country-to-country wire transfers
Most international, country-to-country transfers are executed using the SWIFT system. The co-operative society Society for Worldwide Interbank Financial Telecommunication, or SWIFT, was founded in 1974 by seven international banks. SWIFT operates a world wide network to facilitate the transfer of financial messages. Using these messages, banks can exchange data for transfer of funds between different financial institutions. The Society's headquarters are situated in La Hulpe, on the outskirts of Brussels. S.W.I.F.T. also acts as a United Nations sanctioned International Standards Body (ISO) for the creation and maintenance of financial messaging standards.Article 3 of S.W.I.F.T. states:
"The object of the Company is for the collective benefit of the Members of the Company, the study, creation, utilisation and operation of the means necessary for the telecommunication, transmission and routing of private, confidential and proprietary financial messages"Each financial institution is provided an ISO 9362 code, also known as a Bank Identifier Code, BIC Code, or SWIFT Code. These codes are generally eight characters in length. [8]As an example, Deutsche Bank is an international bank; its head office is based in Frankfurt, Germany. Its SWIFT code for its primary office is DEUTDEFF:DEUT identifies Deutsche Bank DE is the country code for Germany FF is the code for Frankfurt Using an extended code of 11 digits (if the receiving bank has assigned branches or processing areas individual extended codes) allows the payment to be directed to a specific office. For example, DEUTDEFF500 would direct the payment to an office of Deutsche Bank in Bad Homburg.European banks making transfers within the European Union also utilize the International Bank Account Number, or IBAN. [9][edit] Transfers within the United StatesBanks within the United States utilize SWIFT to make payments to banks in countries outside of the United States. For bank-to-bank transfers that are conducted within the United States, the Fedwire system is used. This system utilizes the Federal Reserve System and its assignment of bank routing numbers (in a similar way to how Automated Clearing House, or ACH payments, use those numbers to effect the payment and collection of checks).
One of the largest companies that offers wire transfer is Western Union (minimum of £25 in the UK, or $15 in the US). Western Union began in 1851 in Rochester, New York, and became the preeminent telegraph transfer service. It also introduced Telex, which was a predecessor of today's wire transfer services and is still used by some banks and business entites. Initially based in the United States, the company expanded operations internationally in 1989. [5].Western Union is a stand-alone entity and is not affiliated with a financial institution. Individuals who transfer or receive money with Western Union do not need to have an account with Western Union, or any financial institution. Instead, transfer instructions are sent into a central system, and the recipient can pick up the funds at a Western Union office in their area. Western Union transfers can also be initiated online. [6]
Concern and controversy about Western Union transfers has increased in recent years, due to the increased monitoring of money laundering transactions, as well as concern about terrorist groups using the service, particularly in the wake of 9/11. Although Western Union keeps information about senders and receivers, some transactions can essentially be done anonymously (ie, the receiver is not always obligated to show identification.) [7]
Country-to-country wire transfers
Most international, country-to-country transfers are executed using the SWIFT system. The co-operative society Society for Worldwide Interbank Financial Telecommunication, or SWIFT, was founded in 1974 by seven international banks. SWIFT operates a world wide network to facilitate the transfer of financial messages. Using these messages, banks can exchange data for transfer of funds between different financial institutions. The Society's headquarters are situated in La Hulpe, on the outskirts of Brussels. S.W.I.F.T. also acts as a United Nations sanctioned International Standards Body (ISO) for the creation and maintenance of financial messaging standards.Article 3 of S.W.I.F.T. states:
"The object of the Company is for the collective benefit of the Members of the Company, the study, creation, utilisation and operation of the means necessary for the telecommunication, transmission and routing of private, confidential and proprietary financial messages"Each financial institution is provided an ISO 9362 code, also known as a Bank Identifier Code, BIC Code, or SWIFT Code. These codes are generally eight characters in length. [8]As an example, Deutsche Bank is an international bank; its head office is based in Frankfurt, Germany. Its SWIFT code for its primary office is DEUTDEFF:DEUT identifies Deutsche Bank DE is the country code for Germany FF is the code for Frankfurt Using an extended code of 11 digits (if the receiving bank has assigned branches or processing areas individual extended codes) allows the payment to be directed to a specific office. For example, DEUTDEFF500 would direct the payment to an office of Deutsche Bank in Bad Homburg.European banks making transfers within the European Union also utilize the International Bank Account Number, or IBAN. [9][edit] Transfers within the United StatesBanks within the United States utilize SWIFT to make payments to banks in countries outside of the United States. For bank-to-bank transfers that are conducted within the United States, the Fedwire system is used. This system utilizes the Federal Reserve System and its assignment of bank routing numbers (in a similar way to how Automated Clearing House, or ACH payments, use those numbers to effect the payment and collection of checks).
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