ACH vs wire transfer. 7 key differences

There are four main systems to digitally exchange money in the United States. Two of these—the ACH transfer and the wire transfer—don’t involve using a card. While the latter's advantages are fairly well known, the former goes by several names and suffers from an outdated reputation.

This article will define ACH and wire transfers, explain their differences, and explore how they have evolved to make sending and receiving money easier and safer than ever. 

What’s an ACH transfer?

The Automated Clearing House (ACH) is a network for moving money between bank accounts in the US. It’s the direct evolution of the paper check, transformed into a faster and more accurate digital process. It’s often referred to by functional nicknames like direct deposit, direct debit, auto-pay, or the generic “bank transfer.” It’s also the underlying technology behind most peer-to-peer transfers in the US—services like Venmo, PayPal, Cash App, and Zelle.

ACH transfers can occur between any two financial institutions on the network, pushing or pulling money as needed. Each transaction is submitted to the network as part of a batch, then re-bundled per receiving institution five times per business day. The initiating party can either pay for same-day service or default to one (for debits pulled) or two (for credits pushed) business days. ACH transactions are governed by Nacha, which ensures transactions are safe and fast. 

What’s a wire transfer?

Wire transfers (named in the days of the telegraph wire) are direct transfers between any two financial institutions—though international wires may include one or two intermediaries along the way). Today, wire transfers mean moving money from one bank to another—but it's not quite the same as a bank transfer, which is generally between two local banks. It's also not the same as Western Union, which offers money transfers that function similarly to wire transfers but use Western Union's network rather than SWIFT or Fedwire. 

Instead, wire transfers, sometimes called remittance transfers, are used to send money internationally and are most often used for higher-value items. Think property purchases or large institutional settlement transactions.  

ACH vs. wire transfer: What’s the difference?

ACH and wire transfers are both electronic payments that work in similar ways but with different timelines and rules. Wire transfers are direct, generally immediate transfers between two financial institutions. ACH transfers, meanwhile, pass through the Automated Clearing House and can take up to a few business days.

There are seven major differences between ACH transfers and wire transfers, which we explore in detail below. This chart outlines these differences briefly:

Note: “Cleared” means that the transaction details have been passed on. “Settled” means the two banks have exchanged money to honor the underlying transaction. “Disbursed” means the funds have been released to the end account holder.

1. Transfer speed 

Domestic wire transfers usually clear within minutes and settle within a business day. ACH transfers can take between hours and days to both clear and settle.

How long does an ACH transfer take? The processing time for an ACH transfer to clear can vary. If the originator pays the extra fee for same-day processing and the transaction is initiated on a business day within one of the three same-day processing windows, then clearance, settlement, and disbursement will all happen that day.

Otherwise, settlement will happen the morning of the next business day (for debits) or that of the following business day (for credits). Unless there is an error, disbursement happens within minutes to a few hours after settlement. 

How long does a wire transfer take? A wire transfer clears as soon as the receiving bank signs off on the incoming message. Bank transfers either go through immediately or after any routine due diligence is completed. If the sender pays a premium to use Fedwire, the transfer settles and disburses immediately. 

If the transfer is routed through the Clearing House Interbank Payment System (CHIPS) instead, the timeline depends on the time of the transfer's initiation. If sent by the bank’s mid-day deadline, it will typically settle early that evening. Otherwise, it will settle the next business day.

2. Recall and cancellation policies 

Wire transfers generally settle permanently. However, some ACH transfers can be recalled for up to three months. 

ACH transfers can’t be canceled but can be recalled or disputed. Credit reversals can be requested within five business days due to an error in bank account number, amount, or date—or if a duplicate. Debits can be disputed by the payer as non-authorized for up to 60 days after the statement date of the transaction in question. Debit transactions can also be returned due to insufficient funds for up to two business days. 

Wire transfers can be canceled up until they’re cleared (which can be as quick as a matter of minutes). After that, they are generally irrevocable. The main exceptions are if the bank has sent the transfer to the wrong account or for the wrong amount. In cases of sender’s remorse, the sending bank may try to work with the receiving bank but has limited recourse if the funds have already been withdrawn.

3. Cost 

A consumer using ACH to make or receive a payment does not usually pay a fee. Instead, the organization or business with which they're transacting incurs a fee from their payment processor or bank. A consumer using a wire transfer is generally charged a fee.

What is an ACH transfer fee? ACH transfer fees are variable but generally quite inexpensive—and rarely passed on to consumers. Processing fees can be as little as a tenth of a cent per transaction for banks or up to tens of cents or more for payment processors. Higher dollar-value transactions can also incur percentage-based fees with some processing partners. This can reach 1-1.5% but is usually capped at $5. As processing happens in bulk with little human intervention, ACH transfers incur fewer administrative costs.

What is a wire transfer fee? Wire transfers generally charge both parties. Domestic wires tend to cost up to $35 for the sender and up to $20 for the receiver. International wires can incur another $15-30 for the sender, plus any currency exchange fees. 

4. Direction

While ACH transfers can push or pull money, wire transfers can only push money. 

ACH transfers are bi-directional. This means they also allow the receiver to initiate a transaction on behalf of the sender. This makes them suitable for more use cases.

Wire transfers are credit transactions, moving money from sender to receiver. This means only the sender can initiate them.

5. Frequency 

While ACH transfers can be recurring, wire transfers are generally one-off transactions only. 

ACH transfers can allow for recurring transactions. This makes them attractive for regular billers and employers. Standing authorizations can be given, enabling inexpensive regular debit or credit transactions.

Wire transfers are singular transactions by design (at least for consumers). Each new transaction generally requires a new authorization and a new fee.

6. Transaction size 

ACH transfers are most often used for smaller and more frequent transactions, while wire transfers are generally used for high-value transactions.

ACH transfers are much higher in volume. The ACH network processed over $86 trillion in transfers in 2024 across 33 billion transactions, meaning an average transaction value of around $2,600. The slower settlement time has historically made ACH more suitable for smaller transactions.

Wire transfers are much larger on average. Fedwire (which settles the majority of US wire transfers) handled $1,113 trillion in transfers in 2024 across 209 million transactions. That's an average value of roughly $5.33 million per transaction. This number is somewhat inflated: Many transactions clear through CHIPS before settling on a netted basis through Fedwire. Even so, the true average value is considerable.

7. Geographical usage 

ACH transfers are only used in the US and a few places with bilateral agreements. Wire transfers are widely used worldwide, and international wire transfers are common. 

ACH transfers are generally limited to the US. Despite occasional pushes for greater interoperability between global networks, the coordination required is relatively high. 

Wire transfers are broadly supported worldwide. A mature network of correspondent banks enables transfers across borders and currencies, with only one or two intermediaries in general. Nonetheless, currency exchange fees, at 2-3%, can be costly.

Frequently asked questions about ACH and wire transfers

What’s the difference between ACH and wire transfer?

An ACH transfer is a batch-processed, cost-effective bank transfer often used for payroll, bill payment, and direct deposits. ACH payments typically take 1-3 days to settle. A wire transfer is a faster, individual transaction that moves money between banks, often with higher fees and no option for reversal. Wire transfers are often used to move money internationally. 

Bank transfer vs wire transfer—what is the difference? 

A wire transfer is a direct electronic transfer of funds between banks, often used for large or international transactions, with fees and no reversal option. A bank transfer is a broader term that includes methods like ACH, direct deposits, and internal transfers, which are generally slower but often cost less. 

Which is cheaper: ACH or wire transfers?

ACH is generally cheaper, typically costing less than $5 per transaction, while wire transfers average around $30, making ACH the better payment method for routine transactions.

How fast are ACH transfers compared to wire transfers?

Standard ACH payments take 2-3 days to settle, though same-day ACH is available for an additional fee. Wire transfers generally take between a few minutes to the next day. So, while wire transfers aren't instant, they do process quickly. 

Are bank wire transfers instant? 

Sometimes, but not always. If the transfer uses FedWire, the transfer can be processed immediately. Otherwise, wire transfers are generally processed on the same business day. 

Swift tracing vs ACH tracing—are they the same?

No, SWIFT tracing and ACH tracing are not the same.

• SWIFT tracing tracks international wire transfers sent through the SWIFT network, using a unique transaction reference to monitor progress across banks.

• ACH tracing follows domestic ACH transactions using a trace number, which helps identify and verify payments within the ACH network.

SWIFT tracing is used for international payments, while ACH tracing is primarily for U.S. payments.

How are ACH transfers and wire transfers evolving?

Changes to ACH and wire transfers are allowing for new and better user experiences. 

ACH transfers are getting faster and more efficient thanks to new solutions built on the old infrastructure. Plaid, for example, offers business account verification and authentication tools. It also has tools to check an account for sufficient funds before initiating an ACH transfer. Such tools are helping innovators to create new financial services solutions that leverage the ACH network. 

Wire transfers are being reimagined by fintech companies like Wise. The latter replaces traditional chains of correspondent banks with pools of money in each country. In this way, someone in the US who wants to wire funds to someone in Australia can do so easily. They simply send an inexpensive ACH transfer to Wise’s US account. Wise then sends a local ACH-like transaction from their Australian account to the local recipient. Cutting out the middle parties saves a lot of money—savings that Wise passes on to its customers. 

ACH transfers and wire transfers serve different needs. Luckily for business owners, both user experiences are being improved. This is particularly true for ACH, which is getting faster and easier across the board. For example, in early 2022, Same-Day ACH increased its transaction limit from $100,000 to $1 million. In 2026, they plan to add 3+ hours to each processing day. This makes it a viable, cost-effective alternative to wire transfers for larger transactions.