A wire transfer is an electronic transfer of funds, such as one that
is made over the Federal Reserve Wire Network, or the Clearing House
Interbank Payments System, among others. A wire transfer involves the
movement of funds from one account to another. These transfers involve
guaranteed funds for the recipient, meaning that the sender cannot
revoke the payment after the transfer is made.
Credit managers sometimes require payments from customers [and in
particular from foreign buyers] to be made in advance and by wire transfer.
There are some of the terms credit professionals should know when managing
wire transfer payments:
The beneficiary bank is the bank that receives
the wire transfer.
Beneficiary information includes the name,
account number, bank routing and transit number, and address of
the party for whom the incoming wire transfer is intended.
A debit account is the account to be charged
for the outgoing wire transfer payment.
The foreign current amount is the foreign
currency equivalent after the U.S. dollars are exchanged.
An intermediary bank is a receiving bank,
other than the beneficiary bank, that the wire transfer passes
through before it reaches the beneficiary bank and the seller/beneficiary.
A notification advice is a bank generated
confirmation notice of a received incoming wire transfer. The
notification advice identifies the amount sent, date sent, and
number. The advice may not list who the sender is or the customer/recipient
The originator is the customer or entity
sending the wire transfer payment.
A recall wire request is a request sent to the
beneficiary bank to return a wire transfer payment.
The routing and transit number is the bank's
identification number with the Federal Reserve Bank.
The selling rate is the exchange rate used
to convert U.S. dollars into foreign currency. [Note: Banks usually
charge a fee for this].
Special instructions are additional instructions
to help the beneficiary to apply the incoming wire transfer payment.
SWIFT Code is an eight digit identification
code assigned by SWIFT for international payment transfers.
A trace wire is a request that is sent to
the receiving bank to confirm that the incoming wire was credited
to the beneficiary's account.
The U.S. Equivalent exchange rate is the
amount that results fro the conversion of a foreign currency into
The Value Date is the date on which an incoming
wire becomes available to the receiving bank and its customer.
© 2002 All Rights Reserved