When engaging an Attorney in a legal transaction involving any transfer of assets or money, the term “wire” or “wire transfer” will often come up. The purpose of this article is to explain: 1) what a “wire” is; 2) the benefits of using a “wire”; and 3) why it is pertinent than you opt to use a “wire” in future legal engagements.
What is a Wire?
A “wire” is a term used to describe a wire transfer which is often used in reference to any electronic transfer of money from one person to another through a bank or credit union. So how does it work? A “wire” consists of instructions as to who will be receiving the money, including the account number and how much the recipient of the money will be receiving. The money doesn’t simply go straight from one bank to another; a real-time wire processing system clears the payments similar to the Automated Clearing House processes or ACH transfer. Domestic “wires” within in the United States get processed the day it goes out, usually within several hours of the “wire” instructions being received.
What Are the Benefits of Using a Wire?
First and foremost, speed and security are the greatest benefit of using a wire transfer. A “wire” cannot be cancelled once it is sent unless you attempt to stop it almost immediately after it is sent, or else you cannot get your money back. Speed is another benefit; a wire transfer only takes a few hours or less to complete whereas personal checks can take up to two days depending on the bank or the form in which the check is processed.
Secondly, using a wire transfer ensures that the funds cannot be taken out of the account to which it was transferred. When using a check, you are relying on the other party having the funds available in their account which can often lead to bounced checks, bank holds, and other various regulatory deterrents that lead to a delay or non-payment. When using a wire transfer, the funds are certified and paid up front or else the wire transfer could not occur.
Lastly, using a “wire” will eliminate the risk of check fraud. Today more than ever, the technology exists to seamlessly alter checks on computers, as well as chemically so that someone can fraudulently use a check as if it was their own for any purpose. An example of such fraud would be when engaged in the purchase and sale of a franchise and the buyer issues a check at closing, however, the check is fraudulently created and several days after the closing, the funds are taken from the seller’s account due to said fraud. The preceding example can be avoided by using a wire transfer since the funds and the identity of the bank account and the individual making the payment are certified.
Net to You
Using a “wire” or wire transfer is the safest, fastest, and most effective method of transferring money when engaged in a legal transaction. The next time you need to exchange money, whether it be the sale or purchase of a business or a real estate closing, use a wire transfer and avoid the risks associated with checks.