When it comes to electronic funds transfers, your top two choices are Automated Clearing House (ACH) and Wire Transfers. But what is the difference between them?

Response: A few things stand out.

For example:

  • With same-day processing, wire transfers are faster.
  • The automated clearing house is less expensive and usually costs no more than a few dollars per transaction. Some providers offer free transfers.
  • Bank transfers can send money internationally.
  • Although amount limits vary between providers, wire transfers generally allow for higher payment amounts.
  • The Automated Clearinghouse has the ability to automatically pay recurring expenses, such as rent and utilities.

Wire transfer or ACH?

So is one superior to the other in making trade payments? It depends on the purpose and circumstances of the transaction.

Online accounts payable solution provider Melio said if it had to choose, it would give the advantage for preferred B2B payment to ACH. Being able to pay little or nothing per transfer makes it better for day-to-day transactions, the company said on its blog.

State of Finance Automation

Wire transfers are ideal for urgent payments, but only if paying the fee is worth it. However, remember that Same Day ACH is also available.

On March 18, 2022, Nacha will increase the dollar threshold per transaction for Same Day ACH to $1 million.

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