A bank account number is listed along with the SWIFT code, which is a means of identification.
A wire transfer is an electronic money transfer. In the case of a bank-to-bank transfer, no real money is exchanged, but the electronic balances in the respective accounts are adjusted accordingly. This is a very secure way to transfer funds, as positive identification of both account holders is required and there is no chance of a refund, unlike a personal check.
Many banks and other financial institutions offer domestic wire transfer services to their customers.
Wire transfer has become a very popular method of payment for banking transactions, such as credit card balance transfers, personal account management – for example, transferring funds from a savings account to a checking account – and electronic card purchases on the point of sale. Each time you swipe your ATM card at a retailer, you are authorizing an electronic transfer from the bank account associated with that card to the retailer’s bank account. While these transfers are usually free of charge to the customer, often a fee accompanies others. Sometimes it’s a flat fee, and in other cases it’s based on a percentage of the total funds being transferred. This is usually true when credit card balances are transferred.
Companies like Western Union offer an alternative, anonymous method of wire transfer. So, you can join a Western Union in Arizona, for example, and send 100 US dollars (USD) to Western Union in the Bahamas by simply paying the Arizona office the money plus all fees. Your friend in the Bahamas can go to Western Union to receive the $100 in cash within minutes. Money is transferred electronically.
Electronic money transfer is useful when someone doesn’t have access to a bank account, but it also has disadvantages. If this type of transfer is used to buy something from a private person, the seller can provide false information to the sender. Money can be collected at the receiving end under the false identity, and the party can disappear without ever delivering the promised goods. Law enforcement is also concerned about subversive organizations that use these transfers to fund illegal activities.
A bank-to-bank wire transfer has the advantage of being much more secure and desirable than other forms of payment. These transfers even save paper by reducing the need for checks and deposit slips, making them more environmentally friendly than standard bank forms.