Why Is Wire Transfer Authorization Important?

Wire transfers are helpful when sending money to people who live out of state. However, transfer authorization must be received from the sender in order for the beneficiary to receive any money. The sender authorizes the transfer by providing the name and account number of the receiving party.

Avoid Overdraft Fees

• Signatures must be provided when effecting wire transfers. signature image by Allyson Ricketts from Fotolia.com

  The authorization of wire transfers prevents an overdraft of the sender's account. The sender can't authorize the transfer of funds if the money is not present. Wire transfer authorizations help the sender avoid additional overdraft fees that could occur if he was sending a check.

Theft Prevention

• Wire transfer authorizion provides protection. man image by kuhar from Fotolia.com

  Wire authorizations reduce the chance of theft. The beneficiary must provide a picture identification to complete the process. He also must provide a signature to receive funds. Because wire transfers are electronic, no money is physically exchanged. Authorization is important when dealing with large sums of money.

Security

• The authorization of wire transfers ensures the delivery of the funds to the beneficiary. Sections for the routing number and the dollar amount are located on the wire transfer form. This provides assurance that the dollar amount and bank receiving the transfer are correct.

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