Is ACH The Same As Wire Transfer?

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Is ACH the same as Wire Transfer?

How Are ACH And Wire Transfer Different?

ACH and wire transfer are two different things. Most of the times, people confuse and consider these modes of transactions to be the same. Both modes are different and have various advantages and disadvantages.

The wire transfer can be considered a faster mode of transaction. If you need to send the money to the recipient as soon as possible then you should certainly use wire transfer as a mode of transaction. Wire transfer is more expensive than ACH but it ensures faster delivery of money.

On the other hand ACH is a cheaper solution but still, it may take up to 3 working days for the amount to be credited to the bank account of the merchant or recipient.

Below mentioned a few advantages of wire transfer

Wire transfer is a quick mode of payment transfer. The banks can charge a fee ranging from $10 to $40 depending on where you are sending the money and how much are you sending. Some of the banks may even charge more. So to get a specific value of the cost of wire transfer you should contact your bank.

The recipient gets the money most of the times within 24 working hours

Once the transfer is completed the sender cannot get the money back. As it is considered that the money has been sent by the sender after proper verification.
Most of the times, the recipient may not have to send any information to the bank to accept the payment. Payments are most of the times automatically credited to the recipient’s bank account.

Disadvantages of Wire Transfer

Once the money is sent them the sender has hardly any option to reverse the transaction.
Wire transfers are considered to be riskier than ACH
Dating and Donation scammers use wire transfer to get money from innocent people.

Advantages of ACH Payment Processing

  • Merchants can collect subscription based payments on a monthly basis
  • Most of the High Risk Merchants can use this solution
  • Easy integration on the merchant’s sales website
  • Third Party ACH Payment Service providers offer Virtual Terminal and Moto. With payments gateway for direct ACH transactions merchants can accept orders from US based customers.
  • In most of the ACH transactions, the sender and receiver of the payments are located in the United States. So legal disputes can be handled easily.
  • High risk merchants from specific Industries can take the advantage of Third Party ACH Payment Processors. This can be a great alternative to the conventional Credit or Debit Card Processing accounts.
  • Merchants can accept ACH payment directly from the website and also over the phone. Merchants with big Call Centres can utilize the solution as most of the Credit Card processing companies do not offer solutions to Call Centres.
  • Many companies from industries like online Dating, Peptides, Pharmacy, Adult use high risk ach merchant accounts.

Some Disadvantages of ACH Payment Processing

  • The first disadvantage is the delay in payment. ACH payment processing is not as quick as a wire transfer. Payments can take up to 72 hours in most of the cases but in some cases, it may take even longer.
  • Transactions forwarding to the ACH Network takes place in batches.
  • The ACH processor collects the payment and then transfers the payment as per the terms of an agreement to the merchants business bank account. That means the merchant may have to wait for more to get paid.
  • Most of the ACH payment processors to charge a monthly fee and also charge transaction fee.

The receiver must ensure that he or she has got the confirmation from the send them about the payment.

Customers may request the bank to reverse the transaction in case of any fraud or dispute. To do this customers have to submit substantial information to the bank so that the bank may initiate reversal. Reversals can only be initiated within a specific time frame.

 

Bankim Chandra

Bankim Chandra

Bankim Chandra is a Merchant Account consultant. He works with merchants globally and helps businesses in getting reliable payment processing solution. He writes extensively on the internet about Payment Gateways, Credit Card Processing, Echeck Processing, Chargeback Alerts, ACH and Business Funding.

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