How Wire Transfers Work
If you're a fan of the movies, you've undoubtedly heard wire
transfers mentioned... usually as part of some scheme by the bad
guy to get the money that they're wanting from the good guy,
which is almost always foiled right at the last minute. If this
is all that you know of wire transfers, however, then you likely
don't know much about what they actually are or their real and
legitimate purposes.
In that case, here is a little bit of information about what
wire transfers are, what purpose they serve, where they come
from, and how they work outside of the movies.
The History of Wire Transfers
In order to get an idea of what wire transfers are and where
they come from, it's important to understand where they
originated from. Before computerized banking and modern money
transfer systems existed, the world needed a secure way to send
money from one location to another in a hurry.
This was done by wire transfer, which was a system that enabled
you to give your payment to a teller at a bank or telegraph
office, and they would then send a request via telegraph that
the payment be made to an individual at another bank or office.
The funds would then be transferred from one bank or office to
the other securely at a later date.
This was the common method of transferring money from one bank
account to another, and was also the best way to send money
along ahead of your arrival for others to pay for some of your
expenses when traveling.
How Wire Transfers Work in the Electronic Age Obviously,
telegraph transfers are unnecessary in the age of the internet
and instant messaging. Instead of taking the time to transmit a
telegram to request that funds be paid out to one individual or
be transferred to a certain account, the information can simply
be entered into a computer and all of the transfers can be taken
care of instantly and electronically and without the use of
Morse code.
Though the "wire" involved has changed from old world telegraph
wires to modern fiber optic cable, the term "wire transfer" has
stuck around because the service provided remains essentially
the same as it was two hundred years ago.
What Wire Transfers Are Used For
Even in a world filled with credit cards, debit cards, cheques,
and ATM withdrawals, people still use wire transfers to get
their money to where it needs to be. Some of the more common
uses of wire transfers are sending emergency cash to friends or
relatives in a hurry, making payments to the afore-mentioned
credit cards, transferring funds from one bank account to
another (either for payment purposes or as a means to lend
money), and the covering of business expenses especially when
opening a new business or base of operations.
Where Wire Transfers Are Sent From
Though the days of the old-fashioned telegraph are gone,
businesses that offer wire transfer services still live on. Wire
transfers can generally be sent from most bank branches (sending
money from one account to another), and can also be sent from
specialized offices such as Western Union which was one of the
more successful telegraph offices and still remains in business
today.
Due to the interactivity of the internet, wire transfers can
even be originated online at either your local bank's online
banking portal (if they allow automatic payments and transfers
to be started online) or at the website for services such as
Western Union usually paid for with a credit or debit card.
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