What is the safest way to transfer large amounts of money?

Depending on the needs and the conditions at the recipient’s end, as well as the integrations and ACH capabilities of the delivery bank, you can send money from account to account, via a wire transfer, through ACH transactions, cash-to-cash transfers, and prepaid debit cards. Each and every one of these variants is considered a safe transaction.

Is it legal to transfer large amounts of money?

It is absolutely legal, as long as you can prove that the funds weren’t obtained as a part of a fraudulent scheme.

Are wire transfers over $10,000 reported to the IRS?

Yes, according to the Bank Security Rule and PATRIOT Act, all transactions above $10,000 are reported to the IRS. This applies to both single transfers and to lots of consecutive smaller transfers to the same account within a single day totaling above $10k. Banks and EMIs are required to do this by law.

Are money transfers protected?

Financial transactions are protected from loss by the banks performing the transfer. The only exception is a wilful transfer of funds to a known fraudster. In that case, refunds are not the bank’s liability.

What can you do to protect big-money transfers on the internet?

There are small-ish online payments (like paying the utility bills, gym subscription, groceries, medications, etc.) — and then there are the big ones. Anybody might face the need to send a huge sum of money online — to pay for a child’s tuition abroad, to purchase some assets to invest in some business, you name the reason. As a matter of fact, millions of people transfer billions of dollars over the internet annually.

How are such big electronic money payments made? How to ensure these are safe transactions? What can an anti-fraud system do to protect big-money transfers? Let’s find out in this article.

5 types of big-money transfers online

There is an old $10,000 Rule instated by Bank Secrecy Act from 1970-es and amended by the PATRIOT Act, which states that money deposits (and transfers) over $10K should be additionally checked to prevent funding terrorism and other illegal activity.

There are 5 possibilities to send big sums of money online:

Bank-to-bank transfers
Wire transfers
Automated Clearing House (ACH) transfers
Cash-to-cash transfers
Prepaid debit cards

We describe the benefits and use cases for each approach below.

Bank-to-bank transfers

Most banks in the USA, Europe, and the UK allow sending big sums of money from one IBAN account to another. You can order a big transfer online, over the phone, or in-person by visiting the delivery bank. Transaction fees apply depending on the payment sum, and sometimes it seems that sending many small transfers yourself can be cheaper than ordering one big-money transaction through the bank. But that is not always the case, so check the pricing with your bank before going this route.

Wire transfers

You can do a wire transfer from one card to another with most banks. However, transactions exceeding some preset limit cannot be done by a customer. These must be executed by a bank employee after checking the sender’s account with an anti-fraud tool.

Automated Clearing House (ACH) transfers

With ACH, a trusted intermediary processes the transfer between two linked banks. The Federal Reserve Bank processes more than 66% of ACH transactions in the US, for example. Such transfers are free of charge but are possible only between linked banks.

Cash-to-cash transfers

If the financial organization has its branches all over the world, it is possible to perform cash-to-cash transfers instead of digital ones. You deposit the needed sum and the recipient withdraws it. Western Union, MoneyGram, Payoneer, and PayPal are just some examples of this service. Note, that sending big sums of money this way may raise questions from authorities.

Prepaid debit cards

A popular offer for shopping or paying for various services, prepaid debit cards allow people to deposit a sum of money to a bank account and issue a prepaid card for the receiver. There can be activation or monthly fee, so it’s better to use all the funds on the card quickly.

As you can see, there are several ways to perform electronic money transfers, as well as a couple of cash-to-cash options. But how do you protect big-money transfers online?

Covery — a reliable anti-fraud solution

As with any other transactions, transfers of big sums of money have to comply with various regulations, have to undergo KYC/AML checks, and ensure they are not a part of a fraudulent scheme. Sounds all too familiar for Covery users, doesn’t it?

This is why Covery can be a great choice for any EMI or electronic money institution planning to support big-money transfers worldwide. As end-to-end risk management and anti-fraud platform, Covery uses device fingerprinting, behavioral analysis, supervised Machine Learning, and Trustchain reputational records to verify every such transfer is indeed a safe transaction.