What is a Wire Transfer?

Yumiko Kijima

Wire transfers allow customers to send money electronically - domestically and all over the world. You can arrange a wire transfer through your own bank, or use a specialist provider, depending on your needs and preferences.

This guide will take a look at how wire transfers work, what international wire transfers might cost, and how to get cheaper, faster cross border payments with an alternative service like Wise.

Send money abroad up to 4x cheaper than banks🚀

Wire Transfer: Meaning

A wire transfer is an electronic payment- usually arranged from one bank account to another, although it’s also possible to pay in cash with some banks and payment providers.

When you send a wire payment, no physical money changes hands. This makes it safer than carrying cash or sending a cheque. Instead, you’ll give some key information about your recipient to your own bank, and they will work with the recipient’s bank to deposit the payment digitally. You can expect to be asked for the recipient’s name, bank account number and address, as well as contact numbers and the reason for the payment.

Electronic domestic payments within Malaysia are often made using the interbank GIRO (IBG) system¹. Over 40 of Malaysia’s banks use this system for local payments, which are then processed quickly and at a relatively low cost. Maybank charges MYR0.11 per transfer for example.²

IBG transfers are usually offered in Malaysia for domestic payments only. Unfortunately - as we will see in a moment - wire transfers to destinations outside of Malaysia may be somewhat slower and more expensive with your regular bank.

How International Wire Transfers Work

International wire transfers allow customers to send paperless payments to accounts based abroad. There are fees for this service, which are decided by individual banks, and which may vary according to the amount being sent, and the destination country and currency.

When you’re choosing how to send an international wire transfer you’ll be able to find the fee your own bank will charge you in your account terms and conditions, or by calling the customer service helpline. However, it’s good to know that there are also other potential fees to consider.

Other banks, known as intermediaries, may deduct a processing charge, your recipient’s bank may levy a fee for receiving a payment, and there could also be a markup added to the exchange rate.

The fees deducted by intermediaries are often a surprise, and can mean your recipient gets less than you expect.

These charges are usually a result of the SWIFT payment network - a common and established way for banks to send cross border payments. Under the SWIFT network, your money passes through a series of intermediary banks on the way to its final destination. Up to 3 banks can be involved in one payment - and they can charge a fee for processing the transfer if they wish. This will be deducted from the amount the recipient gets in the end.

Once the money has arrived in the right place, there may be a final charge added by the recipient’s own bank.

Watch out for fees within exchange rates

Those transfer fees aren’t the only cost you should watch out for. There could be a further charge wrapped up in an exchange rate markup.

Let’s put this in context by looking at an example: Sending 10,000 MYR from Malaysia to a £ bank account in the United Kingdom

Provider Transfer fee Exchange rate Recipient gets
Maybank (via online) MYR10 Exchange rate with a markup (1 MYR = GBP 0.183302) GBP 1,831.18
Wise MYR54.65 Real exchange rate (1 MYR = GBP 0.186762) GBP 1,857.41 Send money

*Exchange rates and fees correct at time of research - 12th May 2020, 04:13 GMT +2

This illustrates the fact that even when a bank publishes low transfer fees, you still need to check the exchange rates being used as well. In the example above, Maybank has a low transfer fee, but the markup on the exchange rate means your recipient could lose out compared to using Wise. In fact, research shows that by using the mid-market rate, Wise is up to 4x cheaper than Malaysian banks for cross border payments.

🔍Let’s look at a quick example of Maybank’s exchange rate vs. mid-market rate

Sending 10,000 MYR (including transfer fees)

  • Maybank: 10,000 - 10 = 9,990 MYR will be converted

  • Wise: 10,000 - 54.65 = 9945.35 MYR will be converted

Exchange rates offered

  • Maybank: 1 MYR = 0.183302 GBP

  • Wise: 1 MYR = 0.186762 GBP

Recipient gets…

  • Maybank: 9,990 * 0.183302 = 1,831.18 GBP

  • Wise: 9945.35 * 0.186762 = 1,857.41 GBP

In either case, you spend the same 10,000 MYR - but with Wise, your recipient gets more.

A cheap and transparent alternative: Wise

If you find the possible costs of a regular international transfer confusing, it’s good to know there is a simple, cheap and transparent alternative - Wise.

Wise uses the real exchange rate without any mark-up, and charges a simple, upfront fee which makes it easy to see the true cost of your transfer. You can easily send money overseas from Malaysia to 70+ countries with no hidden fees, online and via the Transferwise app.

And if you need to receive cross border payments, you can get your money to a Wise multi-currency account from the UK, US, Australia, New Zealand and any Eurozone country, just as if you had a local bank account in those countries. Hold dozens of currencies in your account and switch between them using the mid-market exchange rate whenever you want to. Or convert your funds to ringgit and withdraw to your regular bank account. Easy.

How Wise works

If Wise looks different to your regular bank, that’s because it is.

Wise is a specialist in international payments, and uses a modern alternative to the traditional wire transfer system your normal bank uses. Wise has bank accounts all over the world and uses them to send money abroad more efficiently, cutting costs and processing time.

That means that if you want to send MYR to the United Kingdom, you log in to Wise and pay in MYR to the Wise Malaysia account. Wise’s smart system then notifies the Wise UK account to send the agreed amount, in GBP, to the recipient. It’s simple, safe, and effective.

To send money with Wise,

  1. Register for free
  2. Choose an amount to send
  3. Add recipient’s bank details
  4. Verify your identity
  5. Pay for your transfer by bank transfer or debit/credit card

And that is it! You can track your transfer in your account and your recipient will also be notified when a transfer reaches them.

Join over 7 million customers and experience a cheaper, faster way to send money abroad. Try Wise today.


  1. PayNet| Interbank GIRO
  2. Maybank Malaysia | Interbank Giro - FAQs
  3. Wise | Compare exchange rates

Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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