Wire transfer

A payment instruction sent between banks, telling one to debit an account and another to credit one, with the money moving through the accounts the banks hold with each other and ultimately across a central settlement system. Domestically that is usually a national real time or same day settlement scheme. Across borders the instruction travels over an interbank messaging network and the funds pass through one or more correspondent banks that hold the currency being sent. Bank transfer, credit transfer and remittance describe the same thing in different registers.

A transfer is addressed by account identifiers rather than by a card number: an international bank account number and a bank identifier code between countries, local sort and routing codes inside them, together with the beneficiary's name and a reference. Three details decide what actually arrives and when. The fee convention stated on the instruction determines who pays each bank along the route, and where charges are shared, an intermediary can deduct its fee from the amount in transit, so the sum credited is smaller than the sum sent. Any currency conversion is done by whichever bank converts, at that bank's rate, which is a separate cost from the transfer fee. And the value date, the day the funds are actually available, follows cut off times, weekends and the public holidays of every country on the route, so it is not the moment the instruction was sent.

In a brokerage context two features matter more than speed. A wire is not reversible in the way a card payment is: there is no chargeback, and an error is addressed by a recall request that the receiving bank is entitled to refuse, which is exactly why fraud recovery is so difficult once a transfer has settled. And a licensed firm's client money and anti money laundering obligations mean a transfer is matched to a verified account holder, so a payment from a third party name is rejected rather than applied, a transfer arriving without its reference sits unallocated until it is identified, and withdrawals are conventionally returned by the same route to the same account the money arrived from. Segregation is a statement about where client money is held once it arrives, not a statement about how long the transfer takes or what it costs on the way.