Know the Difference: Wire Transfer Vs. ACH

Using a wire transfer to send money is accepted as being one of the quickest ways of getting your funds into another bank account.

Wire Transfer or via ACH?

A wire transfer can potentially take a couple of days to complete, depending on where and who you are sending the cash to, but in most cases, the transfer can actually just take a couple of minutes for the transaction to be finalised.

Whether sending money overseas using a service like ACE-FX or arranging to pay a friend or complete a business transaction, wire transfers are commonplace.

There is also the possibility of completing a transaction using ACH, which is an Automated Clearing House.

Not everyone is aware of the difference between the two facilities, so here is a brief explanation of the respective features that distinguish between the two payment methods.


At first glance, a transaction completed with the aid of an automated clearing house (ACH) may seem similar to a wire transfer, but it is not quite the same.

The banking system has utilised ACH for nearly 40 years and are basically the sort of transaction that you make use of when you pay someone online and also when you use your debit card.

When you request the electronic transfer of funds from your account, all of the transactions that are batched together, are then sent to the clearing house as opposed to a direct bank to bank transaction.

The bank then receives the ACH transactions in one batch, which actually simplifies the process as it is automated and therefore removes the need to treat each transaction individually. The result of how this money is transferred and processed is that your funds will probably not be available as quickly as they would be with a wire transfer.

The advantage of ACH is that it is generally more convenient and less expensive than a wire transfer, but the downside is that it takes longer, and funds may not be available until the following day.

Preventing fraud

One of the problems that you have to be aware of with wire transfers, is the possibility of fraud.

Sending money electronically between different accounts is not such a security issue but cash wire transfers are open to fraudsters collecting your money is care is not taken.

Using a service like Western Union or MoneyGram is definitely a convenient way to get cash to a friend or relative who needs to pick up some funds immediately without using a bank account.

There is no system in place for successfully verifying the sender and the recipient, so it should be fine if you both know each other but if you are paying someone for goods or a third-party you don’t know, there is no real way of avoiding a fraudster using a false identity to get your cash.

Which one to use?

A wire transfer will probably be more expensive than ACH, but if you want a more definite guarantee that your money will arrive within the time that you need it to, a wire transfer is probably the way to go.

The other point to remember with a wire transfer, is that you often get the chance to review the transaction details before you click the send button. There should also be less chance of fraud occurring with a wire transfer because the transactions take place between two financial institutions rather than any outside party.


Edward Gill is a retired bank teller and father of four. When he has the time, he likes to sit down and share some of his insights with others. Look for his informative posts on a variety of financial and travel websites and blogs.

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