What Is a Wire Transfer? How Does It Work in Canada?

Technology has come a long way. Today, you rarely hear the words “I’ll send you a wire.” Instead, it’s “I’ll e-transfer you,” or “Venmo me!” Regardless, that doesn’t mean wire transfers are irrelevant. Despite their seemingly old-school feel, they are still the standard for large, time-sensitive, high-certainty payments.

In this guide, we’ll explain wire transfers, including how they operate, what they cost, and how long they typically take. We’ll also cover scams to be aware of and common mistakes to avoid.

Wire transfer defined

A wire transfer is a direct, electronic transfer of money from bank to bank. Instead of handing over cash or swiping your credit card, your financial institution sends payment instructions through a secure banking network. The receiving bank then deposits the funds into the beneficiary’s account.

What makes wire transfers different from other payment methods is certainty. Once a wire transfer is complete and credited, it is final and reliable. That reliability is why wires remain common for large payments where timing and accuracy matters. For example, reasons for wire transfers include making real estate purchases, settling business invoices, and sending or receiving money internationally. This is in contrast to e-Transfers in Canada, which are suitable for smaller, casual payments between individuals.

How wire transfers work in Canada (domestic wires)

When you send a wire within the country, the money doesn’t simply move from your account to the recipient’s. There are, instead, multiple steps involved. The biggest banks secure payment instructions and settle the transfer through Canada’s high-value payments infrastructure.

For large Canadian-dollar wire transfers, banks use Lynx, the real-time gross settlement (RTGS) system operated by the Bank of Canada. Made specifically for high-value, time-sensitive payments between institutions, Lynx operates on each business day with two settlement windows: one between 12:30am and 6:00pm ET, and another between 6:00pm to 6:30pm ET. Then, they have a finalization window after that.

Here is what the process typically looks like when you send a domestic wire transfer:

1. You initiate the transaction with your bank by providing the receiver’s account name and address, transit number, account number, and dollar amount. Note that initiation may vary slightly by issuer.
2. Your bank sends the payment through Lynx to the recipient’s financial institution.
3. Settlement occurs in real time, often the same day if the wire is sent before the cut-off time. But, as BMO writes in their Wire Payments Processing Schedule, “wire transfer requests received after the deadlines… will be handled the next business day.”
4. The recipient’s bank credits their account, though may charge a fee for the incoming wire transfer.

Domestic wires prioritize certainty and settlement integrity, which is why they remain the standard for large, high-stakes payments in Canada.

How international wire transfers work

Need to send money abroad? International wire transfers operate differently from domestic ones, which is why they often cost more. Not to mention, they usually take longer to complete. Instead of settling through Canada’s domestic payments system, most international wires rely on global messaging networks and multiple banks along the way.

The network responsible for international money movement is SWIFT (Society for Worldwide Interbank Financial Telecommunications). SWIFT doesn’t actually move money itself. Instead, it sends secured, standardized payment messages between banks, indicating where the funds need to go. Each bank on the network has a SWIFT or BIC code, which acts like an international bank identifier and ensures the payment is routed correctly.

When sending money abroad, you may also get asked for an IBAN (International Bank Account Number). While you do not need an IBAN for a domestic transfer, it may be necessary to provide one when wiring money to another country.

Important note: International wires are often more expensive than domestic ones. This is because they usually pass through corresponding or intermediary banks. If your bank doesn’t have a direct relationship with the recipient’s bank, one or more intermediaries may handle the transfer, with each deducting a processing fee. If you send money abroad, be sure to check the extra costs involved (including foreign-exchange markups) as the recipient can end up with less than the amount you sent as a result of these additional fees.

How long does a wire transfer take?

The length of time for wire transfer settlement depends largely on whether the payment stays within Canada or crosses international borders. While wires tend to settle faster than cheques, they are not always instant. The exact timing depends on the bank cut-off times, settlement windows, and the number of institutions involved.

Domestic wire transfer timeline

When you send a Canadian dollar wire within Canada, it often processes on the same business day. The exact timing will depend on your bank’s cut-off time, though. With domestic wire settlement through Lynx, the transaction happens in “real time,” but in practical terms, it usually means the recipient will receive the funds within hours. It is possible that processing takes place the next business day in cases where you submit the wire request after the cut-off time. Weekends and statutory holidays can also delay the process.

Though the settlement occurs quickly, the receiving bank may still take some time to credit the beneficiary’s account. This is particularly true in cases where the institution needs additional verification.

International wire transfer timeline

Sending money abroad generally takes longer. Some wires may arrive within one to three business days, though others are much less quick. The delay is not because of a single slow system, but because of the number of steps involved.

International wires may travel through one or more intermediary banks before reaching the recipient. Each additional bank means more processing time and compliance checks, as well as the potential for delays due to time zone differences, local holidays, or regulatory reviews.

Tip: You are not guaranteed speed with international wire transfers. If the timing matters, be sure to ask your bank when the recipient can realistically expect to receive the funds.

What does a wire transfer cost in Canada?

Wire transfers are generally reliable, for a cost. Unlike everyday e-transfers, wires tend to have multiple fees, and the total cost is not always obvious upfront. This is especially true for international transfers, where charges can appear at different stages of the transaction.

In Canada, wire transfer costs include three categories:

• Outgoing wire fee. Your bank charges this fee to send a wire. The exact amount can vary depending on whether the wire is domestic or international.
• Incoming wire fee. The recipient’s bank might charge a fee to process the transaction.
• Foreign exchange and intermediary fees. These costs are common with international wires, where exchange rate markups and fees from intermediary banks can reduce the final amount the recipient receives.

Safety and common wire transfer scams

The same reasons why wire transfers benefit Canadians also makes them a favourite tool for scammers: their speed and finality. Once a wire reaches the settlement stage, it is usually irreversible.

To reduce your risk, consider the following precautions:

• Be wary of sudden changes to banking details, especially near a closing date or payment deadline.
• Verify the payment instructions using a second channel. For example, rather than relying on an email, call a trusted phone number to confirm the details with the recipient directly. Do not use the number in the email signature either. As The Canadian Bar Association writes, you “should call the recipient to confirm their banking details to avoid being a victim of an email funds diversion scam.”
• Avoid adding unnecessary comments or sensitive information to wire instructions. Doing so can cause delays or raise security concerns.

Takeaway

Wire transfers remain one of the most reliable ways to move large sums of money both in Canada and abroad. Their speed and finality make them well-suited for high-stakes transactions, but those same features also mean there is little room for error. Fees can add up quickly, timelines aren’t always guaranteed, and mistakes can be difficult to undo once the transaction is complete.

Before sending a wire transfer, reach out to your bank and ask if they require you to make the request in person, by phone, or online. Rules will vary by institution and first-time wire transfers often have additional verification needs. Taking the time to confirm bank requirements, fees, and recipient details upfront can help ensure your wire arrives safely and without unnecessary costs.