How International Wires Work

International wire transfers are the invisible highway of global finance, moving billions of dollars across borders every day. They power everything from business deals to investments and remittances. 

Yet, most businesses don’t fully understand how they really work—or how small details can mean the difference between a smooth, cost-effective transfer and a slow, expensive one.

The reality is not all international payments are created equal.

Some transfers take a direct route. Others take a detour through multiple banks, racking up fees at each stop. 

Get it right, and your funds arrive fast, with minimal fees. Get it wrong, and you could be losing money in hidden charges, unnecessary delays or unfavorable exchange rates.

This guide breaks it all down. You’ll learn how international wires work, the key players involved, and how to send money across borders.

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Methodology

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All the numbers and facts here come straight from the source:

• Swifts
• Chime
• World Bank
• Pay.UK
• SEPA

Key Takeaways

• International wire transfers involve multiple financial institutions, not just the sender's and recipient’s banks.
• Intermediary banks process payments when direct bank connections don’t exist, often adding extra fees.
• The SWIFT network enables secure messaging between banks but does not transfer money itself.
• Each bank in the transfer process sets its own processing time, contributing to delays.
• Local payment networks (e.g., Interac, ACH, SEPA) can be faster and cheaper alternatives to SWIFT-based wires.
• Wire transfer fees come from multiple sources: sender’s bank, intermediary banks, and the recipient’s bank.
• Intermediary bank fees are often deducted without upfront disclosure, reducing the final received amount.
• Transfers in major currencies (USD, EUR, GBP) tend to process faster than those involving exotic currencies.
• Routing through multiple banks can extend transfer times to 3–5 business days or more.
• Incorrect recipient banking details are a leading cause of delays and failed transactions.
• Compliance checks for anti-money laundering (AML) regulations can slow down high-value transfers.
• Public holidays in different countries can delay wire transfers due to banking closures.
• Multi-currency accounts help businesses avoid costly foreign exchange markups.

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What Is an International Wire Transfer?

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An international wire transfer is a direct electronic transaction that allows Canadian businesses to send and receive funds across borders securely. 

It facilitates payments to suppliers, transfers between subsidiaries, and other international transactions, providing a reliable way to move money globally. 

Unlike domestic transfers, international wires rely on a network of correspondent banks and financial institutions to ensure funds reach the recipient’s account safely.

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Key Features of International Wire Transfers for Canadian Businesses

• Cross-Border Transactions: Transfers occur between banks in different countries, requiring compliance with international regulations.
• Currency Exchange: If sending money in a different currency than the native currency of the receiving bank account, funds are converted at the applicable exchange rate, which may include a margin set by banks.
• Intermediary Banking Networks: If the sender’s and recipient’s banks don’t have a direct relationship, funds may pass through intermediary banks, adding complexity and potential delays.
• Security and Compliance: Transactions are processed through secure financial networks like SWIFT (Society for Worldwide Interbank Financial Telecommunication) or CHIPS (Clearing House Interbank Payments System) and are subject to anti-money laundering (AML) checks.
• Processing Time: Depending on the banks involved, currency conversion, and compliance reviews, transfers can take anywhere from a few hours to several days.
• Transaction Costs: Fees vary based on the sending bank, intermediary banks, and the recipient's institution. Businesses should account for sending fees, receiving fees, and exchange rate markups.

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The Key Players in an International Wire Transfer for Canadian Businesses

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International wire transfers for Canadian businesses involve multiple financial institutions, each contributing to the process's complexity and cost.

It Starts with the Canadian Bank

The process begins when the business’s bank debits the account, converts the currency if necessary, and transmits payment instructions.

However, not all Canadian banks have direct relationships with international counterparts. This is where intermediary banks come into play.

Intermediary Banks Facilitate Cross-Border Transactions

Also known as correspondent banks, these institutions bridge the gap when the sender’s and recipient’s banks lack a direct connection.

Each intermediary bank may impose additional fees, often without upfront transparency for the sender. 

For context, approximately 86% of cross-border payments on the SWIFT network are executed directly between two institutions or through a single intermediary bank.

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The SWIFT Network

SWIFT, a global messaging system connecting 11,000+ financial institutions across 200+ countries, ensures that payment instructions are accurately delivered. 

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However, while SWIFT provides the framework, it does not control transfer speed or costs. 

Each bank in the transaction chain processes payments on its own timeline, and each may deduct fees before forwarding the funds.

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The Recipient’s Bank Completes the Transfer

Once the payment reaches its final destination, the recipient’s bank deposits the funds into the designated account. 

If currency conversion is needed, the exchange rate applied is typically less favorable than the mid-market rate, increasing costs for businesses.

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The International Wire Transfer Process for Canadian Businesses

International wire transfers are essential for Canadian businesses engaging in cross-border transactions. 

Understanding the process can help prevent delays, minimize costs, and ensure smooth payments.

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Setting Up the Transfer

The process begins when a Canadian business submits a transfer request through its bank. Key details required include:

• The recipient’s name and bank account information
• The SWIFT/BIC code of the recipient’s bank
• The amount and currency of the transfer
• Accuracy is crucial—any errors can cause delays or even lead to failed transactions.

On average, global remittance costs are around 6.2%, but fees vary depending on the destination, currency, and provider.

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Routing the Payment

Once the request is submitted, the Canadian bank reviews it and determines the best route. If both banks have a direct relationship, the transfer is faster and may have lower costs.

However, if no direct link exists, intermediary banks step in to facilitate the transfer. Each intermediary adds processing fees, which can increase the overall cost.

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Managing Cross-Border Transfers

Intermediary banks, also known as correspondent banks, serve as middlemen when a direct transfer isn’t possible. 

While they ensure funds reach the recipient’s bank, they often impose additional fees.

These hidden costs can accumulate for Canadian businesses, particularly when sending payments to regions with complex banking networks.

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Completing the Transaction

Once the recipient’s bank receives the funds, it deposits them into the designated account. The time required for this step depends on factors such as:

• Banking regulations in the destination country
• Currency conversion procedures
• The efficiency of the receiving bank

While some international wire transfers clear within 24-48 hours, those processed via the SWIFT network may take up to five business days or longer. 

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The Role of SWIFT in International Wire Transfers for Canadian Businesses

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International payments rely on seamless communication. 

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a secure messaging network that enables financial institutions to coordinate cross-border transactions efficiently.

Unlike a traditional payment system, SWIFT does not transfer money itself. 

Instead, it transmits encrypted messages between banks, ensuring that funds are routed correctly across different currencies, regulatory environments, and time zones.

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Why SWIFT Matters for Canadian Businesses

SWIFT connects over 11,000 financial institutions across 200+ countries and processes an average of 44.8 million messages daily, facilitating trillions of dollars in global transactions.

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For Canadian businesses engaged in international trade, SWIFT is essential for:

• Verifying recipient details and payment instructions
• Coordinating with intermediary banks to route funds
• Ensuring compliance with global financial regulations
• Reducing fraud risk through encrypted communication
• How SWIFT Works in an International Wire Transfer

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A typical SWIFT-based wire transfer for a Canadian business follows this sequence:

• Initiation: The business requests a transfer through its bank, providing essential details such as the recipient’s name, account number, and SWIFT/BIC code (a unique identifier for banks in the SWIFT network).
• Message Transmission: The Canadian bank sends a SWIFT message to the recipient’s bank, often passing through intermediary banks to ensure proper routing.
• Intermediary Processing: If a direct connection between banks does not exist, intermediary (correspondent) banks process the transaction. These banks may deduct handling fees, and each additional step can slow down the process.
• Final Deposit: The recipient’s bank receives the SWIFT message, processes the payment, and credits the funds to the recipient’s account.

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For Canadian businesses sending international wires, understanding SWIFT's role helps optimize transaction speed, reduce costs, and enhance transparency in cross-border payments.

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The Role of Local Payment Networks for Canadian Businesses

Not all international wire transfers rely on SWIFT. Local payment networks often provide a faster, cost-effective alternative, particularly for transactions within specific regions or between countries with established agreements.

These networks streamline payments by operating within domestic banking infrastructure, reducing reliance on intermediary banks and lowering transaction fees.

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Key Local Payment Networks

• Interac (Canada) – Primarily used for domestic transactions, Interac enables fast, secure business and personal payments, often processed in real-time. Some financial institutions leverage Interac for cross-border payments to the U.S.
• ACH (USA) – The Automated Clearing House (ACH) network facilitates low-cost bank transfers in the U.S., processing over 30 billion transactions annually worth more than $76 trillion. 

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• SEPA (Europe) – The Single Euro Payments Area (SEPA) simplifies euro transactions across 36 European countries, offering near-instant settlement with minimal fees. Businesses dealing with European partners benefit from lower costs and faster processing. 

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• Faster Payments (UK) – This system processes payments within seconds, making it a preferred method for UK domestic transfers. It handles over 4.5 billion transactions annually, valued at £3.7 trillion.
  
  

Some banking providers, like Loop, allow Canadian businesses to access all these domestic payment systems (yes, ACH, SEPA and Faster Payments).

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Why These Networks Matter for Canadian Businesses

Compared to SWIFT, local payment networks offer:

• Lower Costs: SWIFT transactions often involve intermediary bank fees, while local networks typically have fixed, lower-cost pricing structures.
• Faster Settlement: Many local payment networks process transactions in seconds or hours, while SWIFT transfers may take several days.
• Regional Optimization: These systems are designed to comply with local banking regulations, simplify transactions, and reduce complexity.

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How Fees Are Charged in International Wire Transfers for Canadian Businesses

Wire transfers come with costs, and understanding how fees accumulate can help Canadian businesses optimize their international transactions. 

Multiple financial institutions deduct charges at different stages of the process.

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Sender’s Bank Fee

The first fee is charged by the Canadian bank initiating the wire transfer. This can range from $0 to $50 per transaction, depending on: 

• The transfer amount
• The destination country
• Whether the transaction is domestic or international

Some banks offer tiered pricing based on transaction size, while others provide discounted fees for business accounts.

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Intermediary Bank Fees

If the sending and receiving banks lack a direct relationship, intermediary (correspondent) banks process the transaction. Each intermediary may charge an additional $15–$30 per transfer. 

For complex transactions involving multiple intermediaries, fees can add up quickly, significantly reducing the final amount received.

Recipient’s Bank Fee

The recipient’s bank may deduct a fee before depositing the funds. This varies by:

• The bank’s policies
• The country of the recipient
• The total transfer amount

Some banks charge a flat fee of $0–$15, while others deduct a percentage-based fee for higher-value transactions. 

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The Impact on the Transfer Amount

All these fees reduce the total received by the recipient. For example:

A $1,000 international wire transfer may result in the recipient receiving anywhere from $940 to $980, depending on intermediary and recipient bank deductions.

For Canadian businesses, evaluating these costs is essential when choosing the right payment method. Alternative payment networks like Interac, ACH, or SEPA can offer lower-cost solutions for certain international transactions.

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How Long Do International Wire Transfers Take for Canadian Businesses?

The time required for an international wire transfer depends on several factors, including currency type, the number of banks involved, and regulatory checks. 

While some transfers are processed within the same day, others may take several business days to complete.

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Estimated Processing Times by Currency

• Major Currencies (USD, EUR, GBP): Transfers in widely used currencies typically take between same-day and five business days. The exact timeline depends on the banks and payment networks involved. 
• Routing Through Multiple Banks: If intermediary banks are required, expect 3–5 business days or longer, especially if the destination country has a less-developed banking infrastructure or limited direct connections to Canadian banks.

Even when using a reliable banking network, several factors can slow down international wire transfers:

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Incorrect Banking Details

Providing an incorrect SWIFT/BIC code, account number, or recipient details can lead to:

• Transfer failures
• Funds being returned
• Additional processing time to resolve errors

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Bank Verification and Compliance Checks

International wire transfers are subject to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.

High-value or flagged transactions may require manual verification, adding to processing time.

Compliance reviews vary by country and financial institution, meaning some transfers face delays due to enhanced due diligence.

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Intermediary Bank Fees & Processing

If the wire passes through multiple banks, each intermediary:

• Charges fees that may not be disclosed upfront
• Introduces additional processing time, particularly in regions with complex banking infrastructures

Public Holidays & Banking Hours

Bank holidays in Canada or the recipient’s country can delay transactions, as most banks do not process payments on non-business days.

Time zone differences also play a role—wires initiated late in the day may not be processed until the next business cycle.

How to Make International Wire Transfers Faster and Cheaper 

International wire transfers are essential for global transactions, but they can be slow and costly if not optimized. Canadian businesses can take several steps to reduce fees and speed up processing times.

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Use a Multi-Currency Account

A multi-currency account allows businesses to hold and send money in multiple currencies, eliminating unnecessary currency conversions.

• Traditional banks often add a 3% markup on exchange rates.
• Keeping funds in the currency of your recipient avoids these extra costs.

A multi-currency account can streamline transactions and minimize conversion losses for businesses making frequent international payments.

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Verify All Recipient Details Before Sending

Errors in banking details are a major cause of transfer failures and delays. Before sending a wire, double-check:

• Recipient’s name
• Account number
• SWIFT/BIC code
• Any additional bank details required by the receiving country

A simple verification step prevents costly processing delays or failed transactions.

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Use Local Payment Networks Where Available

Local payment networks offer faster and lower-cost alternatives to traditional SWIFT transfers:

• Interac (Canada): Fast, cost-effective domestic transfers
• ACH (USA): Low-cost USD payments within the U.S.
• SEPA (Europe): Quick and affordable euro transactions across 36 European countries
• Faster Payments (UK): Near-instant GBP transfers

Whenever possible, choosing a local payment network over SWIFT can reduce costs and processing time.

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Leverage Modern Fintech Solutions

Traditional banks aren’t optimized for international transfers—they’re often slow and expensive. Modern fintech platforms like Loop offer:

• Faster cross-border payments
• Lower transaction fees
• Transparent pricing without hidden costs

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How Loop Simplifies International Transfers for Canadian Businesses

Loop is an innovative cross-border payment platform designed to eliminate inefficiencies, reduce costs, and speed up transactions for Canadian businesses. 

Unlike traditional banks, Loop offers transparent pricing, faster transfers, and access to local payment networks to make global payments seamless.

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Send and Receive Money in Multiple Currencies

Traditional banks impose exchange rate markups of 1-3%, leading to unexpected costs. Loop, on the other hand, provides:

• Transparent FX conversion with only a 0.5% markup
• No hidden fees—businesses know exactly what they’re paying upfront
• The ability to hold and send multiple currencies, reducing unnecessary conversions

This ensures businesses save on foreign exchange fees and manage international transactions efficiently.

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Faster Transfers Compared to Traditional Banks

International wire transfers through banks can take several days, especially when multiple intermediary banks are involved. Loop speeds up the process by:

• Leveraging direct local payment networks
• Delivering payments within 1-3 business days instead of the standard 3-5+ days 
• Reducing operational delays caused by slow settlements

For businesses that rely on timely supplier payments or payroll, this improvement is critical.

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Transparent Pricing—No Surprise Deductions

Hidden intermediary bank fees can significantly reduce the amount received by the recipient. Loop eliminates this issue by offering:

• Upfront cost visibility—see the exact transfer fee before sending
• No unexpected deductions that eat into payments
• A straightforward, easy-to-understand pricing model

Businesses can accurately forecast expenses and avoid unnecessary costs.

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Seamless Global Transactions with Direct Local Payment Rails

Loop connects Canadian businesses to regional payment networks, offering faster and cheaper cross-border payments:

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Take Control of Your International Payments

Traditional wire transfers come with high fees, long processing times, and unexpected deductions, making cross-border transactions expensive and inefficient.

With Loop, Canadian businesses can eliminate unnecessary costs, speed up payments, and gain full transparency over their international transactions.

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Sign up in minutes and start optimizing your global payments today.