also called automated clearing house
The United States system for moving money directly between bank accounts in batches, used for payroll, bills and everyday transfers, and cheaper than a wire.
ACH is the US system for moving money directly between bank accounts in batches, used for payroll, bills and everyday transfers, and it is cheaper than a wire. The catch for someone abroad is that it is slow by international standards and only works between US accounts, so without a US account you cannot receive an ACH payment at all. Knowing whether a payer uses ACH or a wire tells you exactly what kind of account you need to get paid.
A US client tells you they pay by ACH and you assume it will just reach your foreign account. It cannot, because ACH only runs between US bank accounts, and you are left scrambling to open one before the payment has anywhere to land.
US clients and platforms often pay by ACH, which is slow by international standards and only works between US accounts, so a nomad without a US account cannot receive it. Knowing whether a payer uses ACH or a wire tells you what kind of account you actually need.
The difference is the whole point, so here is each one in a line.
These are the networks a payment can travel on, which differ in speed and cost.
SWIFT is the international messaging system behind cross-border wires, a wire transfer is a direct bank-to-bank payment that moves individually, and SEPA is the cheap euro-area system.
ACH is the US batch system for everyday transfers, a local payment rail is any country's own fast domestic system such as ACH, Faster Payments or SEPA, and an intermediary bank is a middle bank that relays an international transfer when the two banks have no direct link.
A new term lands on this site every day, and the email is how you get it the day it lands. No digest, no roundup, no pitch. One term, what it means, and what it costs you to get it wrong.
Unsubscribe in one click, any time. We do not sell or share your address.