ACH Payments vs Wire Transfers

ACH Payments vs Wire Transfers

When businesses seek ways to receive or send money, the two options commonly given are either ACH or Wire Transfers. These two electronic payment systems are the safest ways to move money without any hassle. Banks ensure that they monitor and track the movement of funds following these two channels.

There are critical differences between these payment methods that you should know before deciding which one to opt for. While wire transfers are known to handle individual requests swiftly, the ACH, on the other hand, is usually done in batches. Most of the time, you will find transactions attached to employees’ payroll toeing the line of ACH transfers. In addition, the difference between them is reflected in their costs which we will discuss later in this article. From this guide, you will understand how the two systems work and how they can help you in your business transactions.

What Is an ACH Transfer and When Do You Use It?

ACH transfers utilise a network of over 10,000 financial institutions, which is reflected in its name, Automated Clearing House Network (ACH). This payment channel is typically used in debit transactions, electronic checks (e-Checks), direct payments and electronic funds transfers (EFTs).

Individuals and businesses can both use ACH transfers. However, the transactions are classified into two groups, Direct Deposits, also referred to as ACH credit transactions, and Direct Payments, called ACH debit transactions. Businesses may also be given the option of bill payment as ACH transfers also facilitate it. The bills can be programmed to pay all other bills with the aid of ACH transfer.

Businesses can use the ACH transfers to pay employees or vendors. The transfer is usually completed in a few days after it is cleared in the bank. This is subject to having sufficient funds in the bank account. The transactions are likely to take longer only in certain circumstances. One of the reasons for delaying the transfer is that if the system detects threats or suspects the nature of the transaction. Suspension of fraud is the primary reason these delays may happen; however, it will be cleared immediately when the bank verifies the transaction.

What Are Wire Transfers and When Are They Used?

Wire transfers are much faster than the ACH transfers and will be completed the same day. This method of payment allows you to move money from one account to another. The money transfer can also be expedited at an extra cost. If you are considering wire transfer, two types exist, domestic and international transfers.

ACH Payments vs Wire Transfers

International or remittance transfers allow you to wire money across countries. The transfer has to be a minimum of $15, and it can be sent from a United States account to other countries. With wire transfers, customers can also transfer huge sums, especially for investment purposes. It is possible to make such a transfer in one day, but there may be a limit for same-day delivery in most cases. If no such limitations exist, then the money will be wired. You should find out from your financial institution if there are any transfer limits as this may vary from bank to bank.

Comparing ACH and Wire Transfers: Pros and Cons

ACH and wire transfers have several differences. It is these differences that will determine which will be the most preferred option for customers. However, before we look at the pros and cons of both payment systems, we will take a closer look at their differences to see how each payment system works. This way, you also get to know their unique characteristics and decide between the two.

ACH Payments vs Wire Transfers

ACH and Wire transfers can both be accessed online, but most customers prefer to use Wire Transfers because of the speed of the transactions and the ability to make payments in large amounts. ACH, on the other hand, allows customers to make smaller payments and more frequently. Here are some of the key differences:

Transfer Speeds

Wire transfers are completed the same day. When you send money to another account, the receiver will be able to withdraw it that day. In some cases, however, there may be a delay when the bank is reviewing the transfer. So, the estimated number of days when the money will arrive should not be longer than 1 to 2 business days. It is best to send the money via wire transfer early to give enough room for eventualities.

ACH transfers are not immediate and will usually be sent in batches. The batches can be sent up to three times per day. However, in some exceptional situations, payments may be dispatched on the same day.


The two payment systems also differ in terms of the risk involved. There is always an associated risk when it comes to receiving and sending money. However, the risk is lower for the receiver. Sending money through a wire transfer will only be successful will the sender has sufficient funds in the account. If the funds are insufficient, the bank will not send the money. The benefit of using wire transfers is that they can be used to move large payments. For instance, if sending money to buy real estate property. It is safe because the bank verifies the sender has the money in the account. The only way to avoid any issues is to ensure that the transfers are done to the correct account. If money is sent to the wrong destination, it is usually not reversible.

ACH, however, is usually very regulated, and the transactions are safer. If you make a mistake entering the wrong details, the bank can authorise a reversal immediately. However, you will need to prove that the error was genuine and with no intention to commit fraud. The significant risk is that both of these payment systems are data. So far, a routing number and account number are involved; if exposed to the wrong hands, it can lead to fraud.


Like we already mentioned, the costs attached to both transaction methods also differ. Usually, it should cost between $10 to $35 to make a wire transfer within the country. However, for international transfers, the costs differ and are higher. The bank will charge a fee for sending money, but the receiver does not bear any fees. However, this is subject to the receiver’s bank as some institutions may have charges that apply.

ACH transfers are free and do not come with any charges to either sender or receiver. Although, it should be noted that certain transactions which are person-to-person may come at a minimal charge. Moreover, businesses using ACH transfers will be charged a fee when paying salaries to employees or when receiving payments.

ACH Payments vs Wire Transfers


ACH Transfer

  • Transactions are more secure and can be reversed when sent to the wrong account.
  • ¬†Some payments may qualify for same-day transfer.
  • There are little to no charges for both sender and receiver.

Wire Transfer

  • The transfer is done the same day for all transactions.
  • The sender can pay large amounts of money on the same day.
  • It is accepted internationally and domestically.


ACH transfer

  • Most payments are received around three business days or more.
  • You can only send funds or obtain them within the country.
  • Payment options are limited to bank transfers.

Wire Transfer

  • Sometimes there may be a delay for the receiver to get funds.
  • Transfers to wrong destinations are irreversible.
  • High charges and additional charges, especially for international wires.

Bottom Line

So, which would it be for you between ACH and wire transfers? If you are considering which one to pick, your choice is easy. You can use both, depending on the nature of your transaction. The two transfer systems have proven useful to customers at different times. If you need to send a considerable amount of money, the best option will be to go for wire transfers. They are suitable for one-time payments.

You need to ensure that you have sufficient funds before initiating the transfer. ACH transfers are recommended for business owners who will be paying their employees regularly. The only reason why most people do not feel inclined towards wire transfers is because of the costs or charges involved. It is better to send through ACH transfers small amounts you send from time to time to friends and family.

If you choose to use either the ACH transfers or wire transfers for your business, you must separate your account from business accounts. You will need to open an ACH merchant account for ACH transactions. The requirements for opening these accounts vary depending on the service provider you use. You can reach us at Paykassma to help you with your financial decisions. We will guide you on what payment systems will suit your business operations.

Olufifun A.

Content Writer

I write unique, well-researched, educative and entertaining articles and blog posts to meet specific needs. I deliver articles on time, and I am diligent, dedicated, and focused on generating amazing results.