Difference Between ACH and Wire Transfer

ACH vs Wire Transfer

ACH (Automated Clearing House) transfer and Wire transfer are two of the most common methods in sending or transferring money. More and more people every day are getting adapted to these two methods because they are not only convenient, but the process is quite fast, as well.

What is ACH?

The ACH money transfer deals with large volume payments like that of a company’s payroll and payments of bills and loans. It is governed by the National Automated Clearing House Association which is more formally known today as NACHA – The Electronic Payments Association. ACH transactions are quite safe since they have rules that state that financial institutions cannot process accounts without the permission of the receiver or the account holder.

What is Wire Transfer?

Wire transfer system is a more personalized method of money transfer. It is usually made from one bank to the other. Others may also refer it as Bank transfer wherein no actual cash is involved but only electronic balances. Majority of the people who have families in other countries uses this transfer system. This is a secure way of sending and/or receiving money since both account holders have a clear identification.

What is the difference between ACH and Wire Transfer?

ACH and wire transfer are two of the most used methods of transferring money. However, each method is different from the other and features a large number of differences that set them apart. ACH may be regarded as business-to-business transaction. It is governed and maintained by NACHA’s set of rules and regulations. Wire transfer is more of a person-to-person transaction. Like ACH, it also has rules set by the banks that are involved in the process. 

ACH money transfer is more suitable for companies and government agencies wherein their transaction is usually in volumes especially on the payroll of the employees. Wire transfer is more suitable for individuals who wish to send/receive money fast and at minimal risk. Even though wire transfer is a bit secure way of sending money, it has still certain flaws. For example, if wire transfer is used to purchase goods online, the chance of being cheated is very high, but in ACH, the identifications can be trusted since an institution needs to be a member first of the ACH network before they can transact.


ACH vs Wire Transfer

• ACH needs the financial institutions or establishments to be a member of the ACH network prior to engaging in transactions while, in Wire transfer, anyone with a bank account can do a transfer.

• ACH usually deals with large volumes of payments or amounts and are more of business-to-business transaction whereas wire transfer is more of a personalized transaction and more suited for ordinary people.