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<h3>What you’ll learn</h3>


<ul>
<li style="list-style-type: none;">
<ul>
<li>What ACH and wire transfers are how they work</li>
</ul>
</li>
</ul>


<ul>
<li style="list-style-type: none;">
<ul>
<li>Key benefits and drawbacks of each payment method</li>
</ul>
</li>
</ul>


<ul>
<li style="list-style-type: none;">
<ul>
<li>When it makes sense to choose an ACH or wire transfer</li>
</ul>
</li>
</ul>



When it comes to transferring money electronically between banks, there are two main options: ACH and wire transfers. Both of these money transfer methods can get the job done, but they have some key differences. Which one makes the most sense for your business? It depends on the type and size of payments you’re making, as well as your sensitivity to cost and speed.


<h2>What is an ACH payment?</h2>


ACH stands for Automated Clearing House, an electronic network that facilitates financial transactions. Like any clearinghouse, the main function of this intermediary is to finalize transactions between buyers and sellers. Essentially, they make sure that both parties hold up their end of the bargain.


When you make a payment via ACH, the funds are automatically transferred from your bank account to the recipient&#8217;s account through this network. ACH payments are fast but not instantaneous, taking 1-3 days for funds to reach their destination.


ACH payments are convenient because they&#8217;re typically cheaper and faster than other methods like paper checks. It’s so easy to set up recurring payments through ACH, which is why this payment method is often used for utility bills or subscription services.


<h2>What is a wire transfer?</h2>


A wire transfer is another type of electronic funds transfer. The difference between ACH and wire transfers is that wires are processed through a different network, called the SWIFT network. Banks use this global network to send and receive information about financial transactions.


When you make a wire transfer, your bank will send a message to the recipient&#8217;s bank with all the necessary details about the transaction. This includes the amount being transferred and where it&#8217;s coming from. The recipient&#8217;s bank will then confirm that they have received the funds and release them to the recipient.


One of the benefits of wire transfers is that they&#8217;re typically processed very quickly &#8211; often within 24 hours. That makes them a good option for situations where you need to send money immediately. Another benefit is that there&#8217;s no risk of fraud since the funds are transferred directly between banks.


<h2>How do ACH Transfers and Wire Transfers Differ?</h2>


ACH transfers and wire transfers differ in a few critical ways. Here&#8217;s a quick rundown:


<h3>1. Cost</h3>


ACH transfers are typically much cheaper than wire transfers. That&#8217;s because they&#8217;re processed through the ACH network, which is less expensive to use than the SWIFT network. Most of the time, ACH transfers will be free while your bank will generally charge between $25-$50 for a wire transfer. If you’re looking to save, ACH payments may be your top choice!


<h3>2. Time</h3>


In general, wire transfers are processed faster than ACH transfers. Again, the difference lies in the network. The SWIFT network is designed for speed, and wire transfers can often be processed in under 24 hours. ACH payments can take a couple of business days to process.If you’re in a pinch, wire transfers might be the way to go.


<h3>3. Security</h3>


While both options offer security that other payment methods can’t, ACH transfers are your best bet if security is your ultimate concern. Because the payment passes through a clearing house with a number of rules and regulations, you can guarantee your payment will be more secure. Wire transfers are popular in scams because once the payment is sent, it can’t be canceled. However, both options provide more security than paper checks.


<h2>ACH vs. Wire Transfer: What’s the Better Option?</h2>


Typically, ACH works well for businesses that need to make recurring payments. They&#8217;re cheaper than wire transfers and very secure. On the other hand, wire transfers are ideal for large one-time sums. They might cost more, but they&#8217;re usually processed very quickly.


Of course, there are exceptions to every rule. If you need to send money urgently, a wire transfer might be your best bet—even if it&#8217;s for a recurring payment.


If you&#8217;re accepting payments, you might want to offer both ACH and wire transfer options to give your customers the flexibility to choose.


<h2>Make Sending &amp; Accepting Payments a Breeze with Hopscotch</h2>


Hopscotch can help your small business pay and get paid seamlessly, regardless of your chosen payment method. Learn how Hopscotch can make accepting &amp; sending payments easier for your business, and <a href="https://gohopscotch.com/">create an account today</a> to experience instant, fee-free payments.

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