What's the difference between ACH, EFT & Wire Transfer payments?

I do minimal work with accounts receivable, and oft get confused (and really dislike consulting the boss who will look at me like I have fourteen heads).

When clients want to pay via EFT (electronic funds transfer) I understand that. Our company has two methods of transfer that they permit me to use:

ACH (automated clearing house) or Wire Transfer.

What is the difference between all of these?

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  • 1 decade ago
    Favorite Answer

    ACH is automatic clearing house. This is used mostly when people get direct deposit into their checking/savings account from their employer when they get paid. There is no fee to receive direct deposit. Wire Transfer on the other hand is a bank to bank transfer using the Federal Reserve System. Both the sending bank and receiving bank will charge fees for this service. EFT is just another was of saying ACH where funds are automaticall pulled from your account.- Mostly this is used when paying a bill over the phone.

  • 4 years ago

    1

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  • Anonymous
    4 years ago

    Difference Between Ach And Wire

  • 5 years ago

    This Site Might Help You.

    RE:

    What's the difference between ACH, EFT & Wire Transfer payments?

    I do minimal work with accounts receivable, and oft get confused (and really dislike consulting the boss who will look at me like I have fourteen heads).

    When clients want to pay via EFT (electronic funds transfer) I understand that. Our company has two methods of transfer that they permit me...

    Source(s): difference ach eft wire transfer payments: https://shortly.im/tcASr
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  • 1 decade ago

    I worked in banking and having experience in this area there is a clear difference.

    ACH are electronic transfers that go through the Automated Clearing House system which is a transfer that takes several business days. Its usually free, but some banks charge a nominal fee.

    Wire transfers go directly through the Federal Reserve instead of an ACH third party, and they can post within 24 hours.

    Wire transfers are usually the preference for people wanting to transfer significant amounts of funds very quickly and can't wait the 2-4 business days an ACH/standard EFT will take. But the price is usually quite substantial (most US banks charge between $20 and $50 for the service and that's just for domestic accounts, international fees will be higher).

    Oh, and EFT is a generic term that can apply to either wire transfer or an ACH transfer. Both are electronic (Electronic Funds Transfer).

    Source(s): I worked for a top 10 bank.
  • dakch
    Lv 4
    4 years ago

    Ach Vs Wire

  • 4 years ago

    ACH could be ONE-TIME payment by calling a service provider and giving them your bank info to deduct (only one time) to pay for services you receive like insurance premium, journal or magazine subscription. It could also be set-up so that your employer CONTINUOUSLY pays your salaries/wages into your bank account.

    EFT is for an individual to MAKE payment on a regular basis where a service provider has your authorization to be pulling a stated, constant and authorized amount from your bank account. It is NOT for an individual to receive money. EFT form needs to be completed and signed by the bank account owner.

    So, ACH is bi-directional and EFT is uni-directional.

    Wire transfer is an instruction to send and receive money through SWIFT among banks on your behalf. It is the fastest of the three and involves cost. Wire transfer could be said to be multi-directional.

  • 5 years ago

    Wire transfers are not done via the Federal Reserve. They are done mostly via SWIFT which is a private 3rd party consortium owned by banks themselves.

    There is something called a Fed Wire that is done via the Federal Reserve system but is mostly used by the banks themselves or to move very large sums.

  • 1 decade ago

    ACH is usually a bank draft that is recurring. Whereas a wire transfer is cash in hand, and a one-time thing. It is usually, like a Western union thing, basically funds transfer

  • 1 decade ago

    I know that wire transfers are the fastest, the most secure, and the most expensive. I think ACH is like a bank club where the banks can lump lots of transactions together and process them basically immediately.

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