What's the Difference between ACH and Wire Transfers?


In today's digital economy, many people prefer to receive employment compensation through direct deposit. They also find it more convenient to pay bills and send money electronically rather than using checks. This form of electronic fund transfer is called an automated clearing house (ACH) transaction. Another form of electronic fund transfer is the wire transfer. Although the end result is the same, there are differences between the two, mainly in the cost and time of delivery.

 ACH Transactions

With an ACH transaction, the bill payments you schedule in your online banking account, for example, are transferred by your bank in a group or a batch, along with all their other customer's scheduled payments, usually at the end of the business day. The batch is sent to the clearing house as a single transaction to be processed, as opposed to a direct bank-to-bank transaction. Banks also receive their ACH transactions in a batch as well. This simplifies the transfer of funds, and because it's completely automated, each individual transaction does not need individual attention. ACH transactions often free, but they are not immediate.

Wire Transfers

A wire transfer, on the other hand, is a direct bank-to-bank transaction that allows you to move money from your account directly into the account of someone else.  When a wire transfer is made, both account holders are verified, as well as the amount of money in each account. Wire transfers are fast and secure; and since they're handled individually by the banks, they can take place in real time: however, there is a fee for this type of service.

Wire Transfer Services

You can also use a wire transfer service like Western Union or MoneyGram to send money. These types of wire transfers do not necessarily require any form of identification and can be conducted anonymously. But this is where fraud can take place because people are sometimes scammed into transferring money under false pretenses to an individual they don't know well, if at all. For example, scam emails requesting money claim that a friend or relative of yours is stuck in Nigeria with no money are commonplace. They come from hackers who have gained access to the email account of your friend or relative. Another example is when you're asked to wire money to the seller of an auction item you purchased online. You might never receive the item as promised, or you may receive an item of lower value.

Transferring funds, either by ACH or wire, is generally safe when using a financial institution. However, if your computer has become infected with malicious software (malware), cybercriminals can steal usernames and passwords and defeat common methods of user authentication employed by financial institutions. You can protect yourself from malware by adopting safe online practices and keeping your computers and network secure. Learn how to secure them in other articles found on this website.  

These helpful tips are provided by www.infosightinc.com,, a computer security company that helps ensure the privacy and security of your corporate, personal and financial information.