1. Speed
Winner: Wire transfer
When it comes to money transfer, speed is always key. Recipients usually don’t want to wait days for payment processing before their funds become available to them.
Wire transfer is king when it comes to transfer speed. When sending money domestically, wire transfer payments are almost always available by the next business day. In many cases, wire transfers can even be available on the same day, as long as you meet the bank’s deadline for same-day transfers. However, human error, holidays, and location can extend this period up to 10 days.
ACH payments, on the other hand, can take three to five days for the funds to become available, though sometimes they can be available much sooner. You might also have the option to pay extra to get funds transferred faster.
2. Costs
Winner: ACH transfer
If you’re looking for a cost-effective way to send money, ACH is the way to go. ACH transactions are usually free for consumers depending on the bank and business bank account you use, but the average cost ranges from 26 to 50 cents per transaction. Though when using payment services like PayPal or Venmo, you might have to pay a higher fee.
Business owners and institutions that use ACH payments for direct deposit have to pay a fee, but it’s never charged to individuals. Therefore, ACH transfers can be a great choice for payroll.
Wire transfers, on the other hand, have costs associated with them. Most domestic wire transfers cost between $20 and $35 to send, and the cost is higher for international wire transfers. Receiving banks may even charge the recipients a small fee for the transfer into their accounts.
3. Availability
Winner: Wire transfer
While both services send money within the United States, only wire transfers offer international transfers. ACH only offers domestic money transfers, although it does have a partner system called Global ACH that can transfer internationally through other bank-to-bank networks.
ACH transfers are bidirectional and allow the receiver to initiate the request to transfer funds. On the other hand, only the sender can start the transfer with wire payments.
4. Safety
Winner: ACH transfer
ACH payments are considered the more secure payment option for senders since Nacha oversees the ACH Network to ensure safety. If there’s an error or mistake with the money transfer, there are ways to reverse the payment.
While there have been scams associated with ACH payments, the transfers typically require you to enter a significant amount of bank account information, which makes them a more secure money transfer option.
Wire transfer is a less secure system for money senders. Wire transfers are fairly instant and once processed, cannot be reversed. If your money is transferred in error or as a result of fraud, it’s almost impossible to get back.
Recipients of wire transfers, however, don’t have too much to worry about, as the funds are accessible immediately.