ACH vs. wire transfer – which one should you use for business payments?

ACH and wire transfer both help you send and receive payments electronically. However, they don’t work in the same way and have several nuances. Businesses need to be aware of the implications of each payment method to determine the right one for making payments.

In this blog, we will explore the differences between ACH vs. wire transfers with an eye for business payments. In the end, you will be able to make an informed decision to make your payments efficient and quick.

What is ACH?

ACH uses the Automated Clearing House (ACH) network to facilitate bank-to-bank payments. Banks and financial institutions group transactions and process them four times a day. It is a form of batch payment processing system governed by the National Automated Clearing House Network (NACHA).

Many of us have used ACH without even realizing it. When you receive your salary, your employer is using ACH to send the funds. Or, you are relying on ACH when you pay your bills online.

ACH balances the debit and credit transactions to transfer funds between bank accounts. The payer will see an ACH debit on their account for the funds they sent. Consequently, the receiver of funds will see an ACH credit for the same amount on their account.

What is Wire Transfer?

Wire transfer is a form of bank-to-bank funds transfer. You can send money directly from your bank account to another bank account in the same or different bank. When you transfer via wire, the money first reaches the bank of the recipient. After that, the receiving bank clears the funds and deposits them in the receiver account.

 Both wire transfer and ACH can be used for business payments. But which one makes more sense for your needs?

ACH vs. Wire Transfer: When to Use What

We will assess ACH vs. wire transfer based on a few factors to help you form a better idea. Our analysis will focus on everyday business situations and the payment system that makes sense.

Transaction Fees

Transaction fees are a big concern for businesses, especially when you are making countless payments daily. Wire transfers generally have a fee of $10 to $35 for payments within the country. You have to pay more for international wire transfers.

ACH is free to use. Businesses can send wages to employee bank accounts using direct deposit without any cost. However, you may need to pay fees if you use a third-party service like a mobile app.


Speed of Payment

You receive money instantly or on the same day when you use a wire transfer. On the other hand, ACH used to take one to three business days traditionally to clear funds.

However, our modern clearing system allows businesses to opt for same-day ACH transfer. You can use a direct deposit in the morning and get the funds cleared in the receiver’s bank account by evening.

Keep in mind that ACH will not clear funds when the Federal Reserve system is closed on weekends or holidays. As a result, you may have to wait till Monday to get funds sent on Friday evening.


Nature of Payment

ACH is ideal for batch payments or regular transfers. For example, you can use ACH to send salaries to your two hundred employees. Or, you can use ACH to pay monthly or annual taxes and bills. It provides you a free way to process your payments and even facilitates bookkeeping.

Wire transfers, on the contrary, are individual payments. You have to initiate each transfer separately from your online banking platform. As a result, wire transfers make sense for one-time or large payments that aren’t frequent.

In addition, you have to pay the fees for each wire transfer.



ACH payments are reversible. An employer can reverse the amount from their employee account if they overpaid by mistake. As a result, you can address erroneous transactions and frauds.

Wire transfers are permanent. You cannot reverse a wire transfer after you have sent money from your account.

Final Thoughts 

Businesses need to be aware of ACH vs. wire transfer nuances to pick the best one for payments. ACH seems to be a good choice for batch payments at zero cost. Wire transfers can be suitable for one-time payments or when you need to send money instantly. You can use a mix of both payment methods to pay your business expenses efficiently.