ACH vs. wire transfer: Which is the better option?

When it comes to electronic funds transfers, your top two choices are automated clearing house (ACH) and wire transfers. But what’s the difference between them?

Answer: A couple of things stand out.

For example:

• With same-day processing, wire transfers are faster.
• Automated clearinghouse is less expensive, usually costing no more than a few dollars per transaction. Some providers offer no-charge transfers.
• Wire transfers can send money internationally.
• While amount limits vary among providers, wire transfers generally allow higher payment amounts.
• Automated clearinghouse has the option to automatically pay recurring expenses, such as rent and utilities.

Wire transfer or ACH?

So is one superior to the other for making business payments? That 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 to nothing per transfer makes it better for everyday transactions, the company said on its blog.

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

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