In the news today, yet another reminder that the international fraudsters like wire-transfers for their difficulty in being reversed. I haven't been bit yet but I'm rather fed up at this point.

The banks claim international wire transfers cannot be reversed as though it were a physical impossibility. This is in fact not true. Wire transfers cannot be reversed because there is insufficient power of law behind rolling them back. Since the US is a net importer of goods, we can be reasonably certain (and in fact this is so) that it is a net-exporter of cash. Action: notify receiving foreign banks which wire transfers are being rolled back due to fraud, update the books, and the cash never follows. And we do only the most blatant ones so that nobody can look good challenging the action.

Old law: Possession of stolen property is a crime.

But international moves have fallout. And I failed to imagine any other than screaming in the press, which I explicitly don't care about. But I know that's not it.

EDIT: I got a fairly good answer that missed a few things. You would never try to run a rebersable and a non-reversable form together as this is directly pointed at authorization failure modes. On reading the answer I now think twice about making it work for non-delivery. It's not supposed to be general recourse but rather a specific defense against corrupted law.

  • Explain how a wire transfer can be reversed. You send a wire transfer to someone called Joe Scammer in a foreign country - say Nigeria, just to pick one completely at random :-) "Joe" (which is probably not his actual name) picks up the money and walks off. How do you reverse that?
    – jamesqf
    Commented Dec 4, 2018 at 5:03
  • 1
    @jamesqf: The interbank transfer is (or rather, would be) rolled back on the records before the physical cash actually moves.
    – Joshua
    Commented Dec 4, 2018 at 5:04
  • Who made it possible (or is this a hypothetical question)? Commented Dec 4, 2018 at 9:39
  • 1
    @Trilarion: It's hypothetical in the sense of convince me it's a bad idea before I write my Congressman.
    – Joshua
    Commented Dec 4, 2018 at 14:20
  • @Joshua: But that is not how many wire transfers actually work. They aren't interbank transfers, but for instance Jose the illegal immigrant using Western Union to send money to the folks at home. (And within the US, actual bank transfers often do take several days: 3-4 business days to get money from my mutual funds to my checking account, about the same to pay my friend who banks at the same credit union...)
    – jamesqf
    Commented Dec 4, 2018 at 19:27

1 Answer 1


Of course there could be a new kind of financial transaction, call it a reversible wire transfer. Anyone who deals with it would be aware that it is reversible and would have to take the necessary precautions.

  • A criminal might pay goods with a reversible transfer and then reverse the transfer after the goods are delivered. The seller might have a physical shipping address, but that could be in a foreign country with a different legal system -- they might have to hire a local lawyer.
  • A criminal might open accounts in two countries, send money abroad and back, and then cancel only the outgoing payment.
  • When a company goes bankrupt, the liquidator could reverse the last couple of outgoing payments to pay other creditors instead.

These problems might be solved by adding a strict time limit on reversals, but then the payment would be considerd incomplete and "still processing" during that time. A business that wants no trouble would only act on the payment once the time is up. This delays international transactions.

  • Imagine you pay for an online movie or ebook and after entering your payment details the site says "thanks a lot, you can start downloading tomorrow."
  • A business like Amazon might wait an extra day before it allows the shipment to leave their warehouse, too.

Alternatively, the providers would factor a certain loss into their business model and simply hike prices for all customers.

Both business-to-business and business-to-consumer markets would still want a non-reversible wire transfer for cases where the delay is unacceptable, and where the seller wants to be sure of being paid.

Read up on negotiable instruments for the legal complication with such a model.

  • 1
    In Germany and probably Europe in general, a lot of online purchases are made through SEPA direct debit which is an easily reversible wire transfer method. For my bank it's as simple as logging into online banking and pressing a button up to a few weeks after the transaction. Amazon still delivers next day and EBooks are available instantly. Most companies just use the same fraud detection methods as for credit cards.
    – user20672
    Commented Dec 4, 2018 at 7:33
  • Case 3 isn't intended to be possible but cases 1 and 2 probably are.
    – Joshua
    Commented Dec 4, 2018 at 14:23
  • @Joshua, we're talking about international transfers. Laws differ widely.
    – o.m.
    Commented Dec 4, 2018 at 16:31
  • How is case 2 supposed to work out? Let's say the criminal has two accounts A and B with a balance of X and 0, respectively. They then transfer X from A to B (transfer t1) and back (t2). At this point the original balance is reestablished. They then cancel t1, resulting in a balance of 2X and -X, respectively. While the former is presumably what they're after, the latter is not desirable to start with and may even accumulate debt due to overdraft interest. Chances are the bank that provides B requests a bit more than "a shipping address" before it agrees to create the account, precisely ... Commented Dec 4, 2018 at 16:55
  • ... for this reason. A lot of this hinges on what kind of "international" is meant her, concerning legal possibilities in the country of B (on its own, as well as with respect to the country of A). Commented Dec 4, 2018 at 16:56

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