11

Me and my friend are both Europeans and used to sending money to other people by just asking for their bank account number. We were sitting around recently and were wondering - is it possible to send each other money by only using the US bank account number? We're both best friends, see each other in person every week and have 100% trust not to misuse each others bank account numbers. But how to actually make it happen?

I've logged into my Bank of America account and I'm not seeing any way to send money to another account besides using Zelle, which works sort of as Paypal/Venmo. There is no place for me to enter my friends bank account number and send the money over. Is this some sort of a special service I need to ask the bank for?

P.S. I know "wire transfer" triggers a lot of negativity in the US due to widespread fraud. For the scope of this question I can assure everyone that this is something we've discussed face-to-face with my actual friend and not a case of a distant "friend" emaling me out of the blue or some other scam-related story.

19
  • 1
    "by just asking for their bank account number". For that to work, the recipient's "bank address" must somehow be encoded in the bank account number. Otherwise, how does the source bank know what bank to sent it to?
    – RonJohn
    Jun 14, 2021 at 2:54
  • 3
    @RonJohn you're right, it would be the account+routing number Jun 14, 2021 at 3:26
  • 30
    @RonJohn: the IBAN uniquely identifies a bank and an account number at that bank. I can use it to transfer money to pretty much any entity in Europe with zero fees, and the money will turn up in the target account on the next day. It's utterly ubiquitous here. That something similar apparently does not exist in the US is, to be honest, baffling. Jun 14, 2021 at 12:30
  • 7
    @RonJohn: to be honest, looking at all the questions here about checks, wire transfers, ACH and whatnot, and comparing that to the ease with which I fire up my online banking app, paste in the IBAN and the amount, authenticate and am done makes me think Americans are very easily satisfied if their Byzantine system is Good Enough... and all the discussions about fees (compared to zero fees on national transfers here) make me wonder about the "cheap" aspect. Jun 14, 2021 at 13:03
  • 2
    @StephanKolassa everyone that I need to send money to are either in Zelle or PayPal. You may call that Byzantine, but I call it "pay at the touch of a button".
    – RonJohn
    Jun 14, 2021 at 13:09

6 Answers 6

14

It's not labeled "wire transfer", but most online banking services have an area called something like "Transfer money". This is usually used to transfer between your own accounts (e.g. moving money from savings to checking), but there should also be a way for you to add external accounts to transfer to/from, for instance to transfer money to a brokerage. You can enter your friend's routing and account numbers there, then transfer the money to them.

9
  • With Bank of America I’m only seeing “transfer between my accounts” and “transfer with Zelle”. No option to enter someone else account details. Jun 14, 2021 at 16:33
  • It looks like this may be an extra service you have to sign up for. See the FAQ
    – Barmar
    Jun 14, 2021 at 16:51
  • 2
    They both move money from here to there, although wire transfers are usually used for larger amounts and may have higher fees.
    – Barmar
    Jun 14, 2021 at 17:18
  • 3
    @JonathanReez Works for my BofA. I never explicitly signed up for anything. Your account may not be old enough, fails risk management, or may not have enough money. On the website, Transfer money... to someone else... in the US... Using an account number... To another bank in the US... Options are 3-day transfer and next-day transfer, which are ACH, and another option is Same-day Wire. A radio button list lets you select which one.
    – user71659
    Jun 14, 2021 at 20:14
  • 2
    @user71659 okay, I've figured it out! Just wasn't looking in the right place Jun 14, 2021 at 20:19
11

In the US, banks are identified by "routing numbers". To electronically send money to someone else, you need their bank routing number plus their individual account number.

Zelle just hides that by having each person enter their bank routing and account numbers once, and then associating them with an email address or cell phone number.

If your friend also has an account at a bank which supports Zelle, then all the two of you need to do is register your cell phone numbers with your banks. Transfer is "instant".

If his bank does not support Zelle then he must register at the Zelle website; transfers then take a day or two, I think, since ACH is used.

6
  • 1
    the whole QA is very confused / confusing. to literally Send A Wire Transfer from Europe to someone in the US, you need ~ 6 pieces of information. It's an old-fashioned messy system.
    – Fattie
    Jun 14, 2021 at 14:26
  • 1
    The generic term for the routing number is National Clearing Code (NCC); it identifies both the bank and the individual branch.  In the UK, for example, it's the sort code; in Australia, New Zealand, and South Africa it's the BSB (Bank State Branch) code; and in the USA it's also known as the ABA (American Bankers Association) code
    – gidds
    Jun 14, 2021 at 20:15
  • …Some countries keep separate codes for the bank and the branch; while in others (such as EU countries) bank accounts are identified by IBANs and so need neither.
    – gidds
    Jun 14, 2021 at 20:16
  • 3
    @gidds IBANs are "only" one number, because they are long numbers.
    – RonJohn
    Jun 14, 2021 at 20:18
  • @RonJohn Oh, indeed.  And they're not unrelated.  Each country defines its own format for IBANs, but in some cases it explicitly includes bank/branch/routing codes.
    – gidds
    Jun 14, 2021 at 20:28
10

You can send money by a wire transfer in the US. But you have to pay a fee. Last time I sent a wire transfer I think the bank charged me $30. Every now and then when my boss has difficulty with the ACH transactions he pays me with a wire transfer, and I have to pay about $15 to receive it. If you're sending $10,000, I suppose a $30 fee is trivial. If you're sending $100, it's a pretty substantial percentage.

When I want to send someone money I usually use PayPal or Zelle, because those are free. But there are limits to how much money you can send by PayPal or Zelle in one day == like $1,000 or something like that. I rarely want to send someone more than $1,000 so those limits usually aren't an issue, but, etc.

The other common way to send money is with an ACH (Automated Clearing House) transaction. I've never tried to use ACH to send money to a friend. I typically get paid with ACH and I send money to my stock broker by ACH, but I've never tried to use it to send money to a friend. I'm not sure how one would go about that.

6
  • But how does one actually do it? I'm not seeing a "send via wire transfer" button anywhere in my BoA account. Jun 14, 2021 at 3:29
  • It's not something that most people do so I don't recall ever seeing an option for it on a bank web site. Call the bank and say you want to send a wire transfer and they should have someone who can walk you through how to do it. I think I've only sent two wire transfers in my life, and both times I went to the bank and talked to an actual human being. If there was a way to do it through their web site, I have no idea how.
    – Jay
    Jun 14, 2021 at 3:41
  • 1
    In the context of european bank transfers, a ACH is probably closest to what is meant.
    – glglgl
    Jun 14, 2021 at 7:43
  • 2
    A wire transfer is a standard means of transfer, and certainly supported by Bank of America on all platforms. The current wording on their website is "To/from other banks (including wires)" in the transfers section. When adding the recipient account, you will be able to specify SWIFT, IBAN, or Routing/Account number depending upon the destination account type. As already mentioned, wire transfers from US banks can be expensive, unlike (for example) EU-internal transfers over the SWIFT network. Jun 14, 2021 at 12:10
  • @JonathanReez - it seems to vary by bank. Wells Fargo, for example, lists "Wire Money" as a payment option in their online banking. Jun 14, 2021 at 13:42
5

To literally answer the questions,

Is it possible to send money to my friend in the US using a wire transfer?

Yes, obviously.

Currently on the order of 10,000 to 20,000 wire transfers are sent from Europe to the US every weekday.

is it possible to send each other money by only using the US bank account number

No, to send a wire transfer you need about five pieces of information, including that number.

Bank of America account ... not seeing any way to send money

It's really common that US bank's web sites do not automate wire transfers. Typically you have to drop in to a branch, make a phone call etc. (As you surely know in general US banks technology is hilariously behind the times compared to Europe/Asia. This is unsurprising and commonly known.)

"Is this some sort of a special service I need to ask the bank for?"

It's hardly "special" since around half a million wire transfers originate from the US each day, but, simply re-read the previous para. "It's really common that US bank's web sites do not automate wire transfers. Typically you have to drop in to a branch, make a phone call etc."

This is unsurprising and common - there are a zillion questions on here about that issue from Europeans who are astounded there's no "send wire" button in most US bank websites.

Finally the "elephant in the room" on this question is that realistically (to massively save fees, time and inconvenience) you just use ofx or transferwise which are the two enormous businesses which exist exactly for this purpose, with zillions of transactions every day between europe and the US.

14
  • 1
    Alright this confirms what I suspected (the “call the bank” part). Accepting. Jun 14, 2021 at 16:05
  • 1
    More than a decade ago, I had a BoA account and regularly used my online access to transfer money to other accounts. Some of these were to other BoA accounts, but I also did it to some who had accounts at other banks. All I needed was the Routing number for the target bank, and their account number. For the BoA accounts, transfer was immediate. For the other banks, it could take several days (1-3) for the transfer to complete. Jun 14, 2021 at 16:46
  • hi @MichaelRichardson that's interesting, but I suspect they were not "wire transfers". (Usually known as "SWIFT-system transfers" although that's not really correct.) There are a number of different transfer technologies and this question is about "wire transfers" (indeed, from europe to US)
    – Fattie
    Jun 14, 2021 at 16:53
  • 1
    The Bank of America website absolutely does have a way to do wire transfers. Currently it's under "Transfer -> To/from other banks (includes wires)", and you need to "Add account/recipient" before you can send to it.
    – hobbs
    Jun 14, 2021 at 17:09
  • 1
    @hobbs looks like I’d have to call BoA to activate it. It’s not available for me. Jun 14, 2021 at 17:29
1

I'm not sure how much value this will offer to future visitors, but to answer the question:

Is this some sort of a special service I need to ask the bank for?

You can place wire transfers through Bank of America online. Once you are logged into your account, hover over "Transfer | Zelle" and then click "To / from other banks (includes wires)".

From here you can initiate the wire transfer process which (currently) has a $45 fee.

2
  • From the original post: I'm not seeing any way to send money to another account besides using Zelle, Jun 14, 2021 at 20:59
  • 1
    @MichaelRichardson Indeed, but you can send SWIFT transfers from BOA online banking. It's just hidden in a submenu of Zelle. Another hypothesis is that the features are different depending on the state the account was opened, but I have no trouble sending them.
    – Ian
    Jun 14, 2021 at 21:00
1

As other answers have stated, there are a number of ways and many different types of clearing channels that one can send money to a beneficiary. Each method has various pros and cons and serve different types of purposes.

A "wire transfer" is a somewhat generic term that usually refers to an older set of technologies that allow a person or organization to send some amount of money to a bank account at some other bank or financial institution, usually via one or more intermediates or correspondents, and assisted through either a centralized clearing/settlement bank (Eg. Fed Funds/Federal Reserve, CHIPs) or through some centralized message broker (Eg. SWIFT Network).

Lets keep this about SWIFT; this is an organization that essentially provides a messaging service between financial institutions that are members all over the world. These participants dont really have any "money" being held in accounts with SWIFT, but instead they exchange different types of messages with each other. These messages usually have to do with various money movement, balance reconciliation, and reports. In the case of money movement, if a participant Deutsche Bank in lets say Germany has a relationship with a participant Bank of America in the United States, then Deutsche Bank may have an account with funds (USD or Euro) on the books with Bank of America (and vice-versa). Colloquially this is refered to as a NOSTRO account (Our financial institution account at another bank) and VOSTRO account (their financial institution account at our bank). On the ledgers for these two banks they are basically seen as assets being held by another bank.

So what are these NOSTRO and VOSTRO accounts used for? A number of things, but usually it is working money that allows for a bank like Deutsche Bank for instance, to quickly move money for one of their customers to a beneficiary account holder at Bank of America. Here is what would typically happen in a normal wire transfer:

  1. The "debtor" is a customer and account holder at Deutsche Bank and communicates "intent" to pay a "beneficiary" with an account at Bank of America.
  2. Deutsche collects the payment instructions, account numbers, account holder identity, BIC or IBAN (unique identifiers for banks across the world), etc...
  3. SWIFT is determined to be how the payment instruction message is to be sent to Bank of America and the MESSAGE is sent to the SWIFT network.
  4. SWIFT sends a message to Deutsche letting them know how much money will be drawn from Deutsches NOSTRO account at Bank of America to cover the payment.
  5. SWIFT sends a message to Bank of America letting them know to fund the beneficiary account for the amount of the payment, and to draw the money to cover that transfer from Deutsches account at Bank of America.

In the example above, the "Debtor Agent" Deutsche Bank in this instance is responsible for transfering the funds from the customer account to cover the payment. They are also responsible for making sure there is enough money in their NOSTRO account at Bank of America to cover the transfer to the beneficiary. Things like foreign currency exchange details, fee structures and responsiblities are all determined before hand. The important thing to note though is that this whole song and dance is basically a coordinated series of accounting entries local to each banks ledger (eg. every dollar must be deducted from one place and credited to another with everything balancing to 0 in the end), and with messaging occurring between the banks to ensure that this all occurs appropriately.

This same principle occurs when intermediate or correspondent banks are involved. Lets say that the beneficiary of the payment happens to be an account holder at Bank of New Zealand. The problem is that Deutsche Bank does not have a direct banking relationship with Bank of New Zealand and they do not have accounts with one another. We can still potentially send this payment however by specifying an intermediary bank that happens to have relationships and accounts with both. In this instance we can identify the routing as Deutsche -> Bank of Australia -> Bank of New Zealand. We essentially move money from the debtor account to Deutsches account at Bank of Australia, then from Deutsches account at Bank of Autralia to Bank of New Zealands account at Bank of Australia, then from Bank of New Zealands Account at Bank of Australia to the beneficiary account at Bank of New Zealand. The SWIFT network greases the wheels for all of this by sending payment transfer messages to all three financial institutions so that the payment can make its way.

Domestic wire transfers work a little bit differently than SWIFT and are very country and region specific. In the United States, all US banks will have a central bank account at the Federal Reserve. The Fed Funds network is a Federal Reserve bank service that allows banks to exchange domestic wire transfers directly between any two US banks via transfer of funds from one Federal Reserve settlement account to another. There is an analogue to this in the European Union as well.

If it all seems convoluted, and slow, that is because it is. These systems for international money movement have been established decades ago, however it still works and is still very much in use. Most of the time when you as a customer of a bank use payment services, you are generally not sending wire transfers directly, although you absolutely can. Wire transfers and sending them successfully can be very complicated so most of the time these details are abstracted away from your typical retail checking account holder. Most of the time when you and I send money domestically or internationally, we typically have many other suitable options to use than a classic wire transfer so a retail consumer sending wire transfers is typically seen as an exception case as opposed to business as usual so it is generally not as easily accessible and widely variable depending on who your bank is. When you look at other ways to send money, eg. ACH, Zelle, SEPA, etc.. much of the time it is abstraction from the same accounting that is constantly going on between banks behind the scenes, just usually on a massive scale. ACH for instance will be settled and cleared between two financial institutions in bulk, where they may process millions of ACH transactions between debtors and beneficiaries at different banks, but the money to cover the net sum (positive or negative) of all these transactions still needs to be available in settlement accounts at either a central bank or between shared accounts between two banks internationally. For example if Deutsche bank processed 2 million non-wire transactions between it and Bank of America and they found that their account at Bank of America will be short 10 million USD net, then you guessed, Deutsche Bank will need to use SWIFT to wire that 10 million USD to Bank of America to cover the difference.

Zelle is an interesting case because it is so convenient for customers that it almost appears to work like magic, but there is a dirty little secret behind the scenes that most people dont really know about. Zelle is a messaging platform, much like SWIFT, however Zelle participants agree to immediately credit a beneficiary the amount of the Zelle payment even if the sending bank hasn't cleared the funds to them yet! This is known as counterparty risk, where I am crediting my customer the funds on a payment he received, even before I myself as a bank received the funds from the other bank. If the other bank is not operating in good faith, or has a liquidity crisis, or whatever, I as a bank might be out the money. Once it is in my customers account, they could potentially liquidate and/or close the account after receiving the Zelle and I have no way to recover the funds. Usually the settlement funds are sent via ACH or wire but that might not happen for several days. Again though, wire transfers form the basis of how banks maintain liquidity on a payment network.

So why are direct wire transfers still being used? There is a direct and clear assurance as to exactly how the money will be moved, estimates on when it will arrive, and in many jurisdictions a wire transfer is a legal contractual agreement between you and your bank. You agree to pay $25-$50 USD in fees, and the bank agrees to deliver your money by a specific date. If they are not successful in doing so you may hold them liable for damages. This is why wire transfers are popular as a means of corporate payables, real estate transactions, legal payments and corporate tax payments.

So basically payments are complicated, and your options can vary wildly depending on who you bank with. Your best bet is to phone or walk into your local branch office and speak to a representative about your options and they will be able to walk you through the details.

Source: I currently work for a large financial institution as a software engineer in the payments space and am directly involved with systems that deal in wire transfers.

Not the answer you're looking for? Browse other questions tagged or ask your own question.