When it comes to sending and receiving payments, you want something convenient for your needs. In this article, we’ll explain the difference between the Automated Clearing House (ACH) and wire payments, and give you some things to consider when comparing the two.
While both methods are similar in that they are electronically transferred, here are some of their differences:
ACH payments take longer but are less expensive
- Payment goes through a bank or credit union before being transferred into a bank account.
- They’re usually less expensive. ACH payments are usually free for the person receiving payment or could cost up to $3 per transfer.
- Typically, ACH payments are more secure since funds can be reversed if there’s evidence of fraud or errors in payment.
- ACH payments are only available in the United States.
- Payments take longer. It can take a few days to see funds in your account.
- You can both send and request ACH payments.
Wire transfer payments are faster and can be sent internationally
- Wire transfers money directly from one bank account to another.
- These are faster. You’ll have access to the funds in your bank account within minutes.
- They can be sent internationally.
- Wire payments are more expensive, costing between $10-30 per transfer.
- You cannot request wire transfer payments. There is only the option to send payments to someone.
Determine which one is best for you and your business
ACH payments are beneficial for frequent or reoccurring payments such as payroll payments. This is also known as direct deposit. When it comes to your crew, paying them through ACH is the best way to go. An ACH payment can also be a one-time payment if you choose to use this route for clients. Look into services like PayPal and Venmo to use ACH payments with your clients.
If you’re interested in ACH transfers, check with your bank and see how much they charge. You can also search for companies who process ACH payments like BluePay. A little research will help you find which option works best for you.
If you’re working with someone and they need a large sum of money fast, a wire transfer would benefit in a time-sensitive situation. Like ACH payments, you can look into your bank and ask about their wiring fees. The fees vary depending on the company. There are also popular and trustworthy wiring companies you can compare with your bank.
When it comes to which option is better, there isn’t a right or wrong answer. Determine what your needs are to help you decide whether ACH payments or wire transfers would work best for you.