Wire transfers are facilitated either by a bank or through a third party provider and allow you to quickly transfer money between two parties.
An automated clearing house (ACH) payment occurs when money from one bank or financial institution is moved to another. ACH payments move through a national network, allowing a clearinghouse to process them. ACH payments are only available between banks and accounts located in the United States.
ACH vs Wire
- Wire transfers are initiated and processed by banks, while ACH payments are processed automatically through a clearinghouse.
- Although automatic, ACH payments are not instantaneous. Furthermore, the payment will not clear a customer’s bank account until the clearinghouse processes the batch that the payment is part of. This process could take hours or a day or two.
- For wire transfers, only the sender can initiate the transfer. For ACH payments, businesses or individuals can send or receive funds.
To arrange ACH payments for your business, the process depends upon your bank. Some banks allow you to set up ACH payments online. Other banks require a form to be completed by the receiver, who then shares that information with your bank.
To arrange a wire transfer, again, it depends on the sender’s bank policies. You may be able to arrange a wire transfer over the phone. Other banks may require your signature as permission to initiate the wire.