How do international wire transfers work?

Canada By Mitchell Steiman April 15, 2022

Article summary

Want to send money to family and friends overseas to help out with bill payments or celebrate a special occasion? Then understanding how an international wire transfer works is a good place to start.

Learning what exactly they are, how they work and the ways to make an international wire transfer can help you decide if it’s the right method for you.

So, how do international wire transfers work? And could they benefit you? In this guide, we detail everything you need to know about sending money overseas from Canada via wire transfer.


In this article


What is an international wire transfer?

An international wire transfer is simply an electronic transfer of money via a transfer service or bank that starts in one country and is settled in another.

The transfer takes place between a domestic and international bank account, with no physical handling of funds. The sender is required to pay for any transfer fees1 and provide necessary billing and account information.

A domestic wire transfer works in a similar way. However, transfers are made between two banks within the same country, rather than overseas.


How does an international wire transfer work?

The process of sending money to your loved ones in another country with a wire transfer is quite straightforward. In fact, the bank or money transfer service you use does most of the work.

Generally, all you need to focus on is having the right amount of funds and accurate account details to hand. An international wire transfer normally works like this:

  1. You, as the sender, pay for the funds to be sent and cover any transfer fees¹. You can normally do this online, via an app, or in person at a bank or money transfer service location.
  2. Your bank, or chosen transfer service, contacts the bank of the receiver with payment instructions.
  3. As the process involves sending funds overseas rather than domestically, a unique bank identification code called a SWIFT code or number is usually required. This identifies banks and financial institutions around the world and is used to identify your specific wire transfer so the money can be received.
  4. The money is then transferred into the receiver’s account. The two banks (or a money transfer service) exchange money to pay for the funds.


How to make an international wire transfer

There are two main ways to make an international wire transfer. You can either choose to send money via your bank or use a money transfer service.

Depending on your chosen method, this slightly affects how you can send and receive an international wire transfer. Whichever way you choose, making an international wire transfer is straightforward.

How to make bank-to-bank international wire transfers

  1. To make a bank-to-bank transfer, simply visit your local branch or your bank’s website, and provide them with the necessary ID. You’ll also need to fill out any forms requested.
  2. Accept (or decline) the exchange rate¹ offered.
  3. If you’re happy to go ahead, provide all the relevant account details for yourself and the receiver.
  4. Next, simply pay for your international wire transfer and any exchange rate fees¹. The money must be in your account at the time of sending.
  5. The bank will send the money to the receiver’s account.

How to wire money internationally via money service providers

  1. When using a money transfer service to make an international wire transfer, you can often do this in person, online, or via an app.
  2. Simply choose the currency your funds need to be exchanged into based on the destination country and the amount you wish to send.
  3. Double-check any exchange rates and transfer fees.¹
  4. If you’re happy, you will need to provide all the relevant account details for your receiver.
  5. Finally, pay for the transfer, covering any transfer fees¹ included.


What to consider when making an international wire transfer

Before you start the international wire transfer process, there are a few factors to consider. These include:

  • Time zones – as you and your receiver’s banks may operate in different international time zones, this can affect the time and day when money is received.
  • Amount sent – make sure you have the right amount of funds available in your own account at the time of sending, inclusive of any transfer fees¹ , especially if you’re using a bank for your wire transfer.
  • Intended use – some banks and transfer services may ask you to state the intended use of your funds. Financial institutions have the right to decline a transfer if they believe it may be illegal, suspicious, or not compatible with internal guidelines.
  • Transfer fees¹  – you should evaluate all exchange rates and transfer fees¹ before sending money internationally, to make sure you get the best deal for the amount you wish to send.



How long does an international wire transfer take?

International wire transfers typically take anywhere from one to five days for funds to be received. It depends on whether you use a bank or money transfer service, the destination country and your receiver’s bank.

How much do international wire transfers cost?

The cost of an international wire transfer depends on the exchange rates at the time and any transfer fees1 financial institutions have in place. It’s a good idea to double-check these numbers before sending.

Do you pay tax on international wire transfers?

No, in Canada, there is no tax on any money received via an international wire transfer as a gift. However, you may be taxed if you send or receive a large amount of money via wire transfer intended for business purpose use.

Still got a few more questions? Learn more in our guide to what a wire transfer is.

1 Western Union also makes money from currency exchange. When choosing a money transmitter, carefully compare both transfer fees and exchange rates. Fees, foreign exchange rates and taxes may vary by brand, channel, and location based on a number of factors. Fees and rates subject to change without notice.