ACH Vs. Wire Transfers

ACH Transfers or Automated Clearing House Transfers are similar to wire transfers, as they are used for inter-bank fund exchange. The main thing that sets them apart is that wire transfers are made on the same day, while ACH exchanges may take more time. Wire transfers also cost a lot more.

Learning about the differences between ACH and wire transfers can help you make a more calculated decision regarding which method is more suitable for your business or personal situation. This article shall look at both individually, after which we will compare and list points that set both apart.

What Is a Wire Transfer?

A wire transfer is an electronic fund transfer method used to move money between two bank accounts. It is used to process payments on the same day at a price. Wire transfers can further be divided into two types:

  • Domestic wire transfers which transfer funds between bank accounts in the same region.
  • International or remittance transfers which are used for transferring money globally and may require a certain amount for some places.

Wire transfers are used to make huge or single-time payments. They are often used in real estate sectors but have sending limits.

What Is an ACH Transfer?

ACH money transfers, also known as Automated Clearing House, include 10k finance institutions that help create the ACH network. This network is used for processing various payments:

  • Direct debits
  • Direct deposits
  • Direct payments
  • eChecks (Electronic Checks)
  • EFTs (Electronic Funds Transfer)

This method of money transfer is used for personal transfers as well as business purposes. It can further be divided into:

  1. Direct payments (ACH debit)
  2. Direct deposits (ACH credit)

Some finance institutions allow users to opt for electronic bill payments. They also allow you to transfer to merchants globally.

As a business, most companies can quickly pay vendors and employees through this method. These transfers take longer than wire transfers and will process in a few business days. Fraud, unforeseen circumstances, and holidays can elongate this duration.

6 Major Differences Between Wire and ACH Transfers

Picking one fund transfer method is dependent on deducing which one suits your needs best. You can identify this by looking at the significant differences between the two:


While wire transfers can be made domestically and internationally, ACH does not offer the same. An ACH transfer can only be made for two domestic regions or locally. Very rarely a global ACH option may be available. Otherwise, you will have to opt for wire transfers if you wish to pay someone who lives in a different region or country.


Security is probably one of the most important things people consider before making any payments, especially electronically or online. Paper checks are the least secure money transfer method, while ACH and wire offer substantial security.

Finance institutions that accommodate ACH payments encrypt bank information before making the transfer. This way, the electronic transfer is protected from malware and hackers.

Apart from this, wire and ACH transfers will only dispatch the amount once steps for verification of banking information are completed. This eliminates the chances of fraud and errors.Wire transfers cannot be halted quickly due to the fast transfer situation, but ACH can. The time frame for cancellation of a wire transfer is significantly shorter than the one offered by ACH.

Transfer Limit and Processing Time

Both kinds of payment methods have a daily limit. These can be confirmed through your bank/credit union. Wire transfers are processed the same business day, while ACH may take one to two business days.

Fund Access

As soon as a wire transfer is received, it can be accessed immediately, whereas ACH may take longer. Most people will see a pending status which will only change once the funds are released and cleared. This can take an additional two to three business days.

Request Reversal

An ACH payment can be reversed, unlike wire transfers. If you made an error, your wire payment is fixed, and the initiation cannot be stopped.

This can be a significant drawback, as your money might reach the incorrect person, and you can most likely do nothing about it. Your funds will likely be lost if you make an error while wire transferring a payment. 

Processing Fee

All wire transfers cost an additional $10 to $35. This is a processing fee that may also be sometimes increased through the addition of a nominal fee. A nominal fee is charged chiefly for incoming payments.

On the other hand, ACH payments are free. These will only cost you extra if you speed up a billing process or wish to transfer to banks that are not listed, such as outside banks.

Which Payment Processing Method Should I Choose?


The recurring payment capability makes this method more suitable for B2B, batch payments, and paying employees or vendors continually. Any business can easily send cost-free payments through particular financial institutions to ease the burden.

Employees can also save up on processing fees and relax as their payments are more secure due to encrypted transfers.


Wire payments are more suited for single-time transactions. You will incur a processing fee as new authorizations are always charged.

However, they can be used to make quick money transfers that involve a considerable sum of money. Wire transfers are suitable for B2B, real estate, or M&A payments. Global, personal, down payments, closing costs, or any one-time transfers are eligible. 


Both kinds of payment methods have their pros and cons. Deciphering which one suits your needs or business situation depends on assessing whether you need to make recurring or single-time payments.

Processing fees, time restraint, region limits, security, and request reversal are also essential to consider to see which method fulfills your needs best. 

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