What’s the Difference Between ACH vs Wire Transfers?

If you're weighing ACH versus wire transfers for payroll, you’re looking at more than just speed and cost. You need to choose the right payment method for the right scenario, without introducing risk or inefficiency.

Deel brings deep operational expertise to this topic, having supported thousands of companies in navigating global payroll, local banking regulations, and payment compliance. We understand the real-world nuances of getting payroll right.

This guide breaks down both options in plain terms, mapping out timelines, fees, reversibility, and global suitability. For finance leads juggling compliance, payroll accuracy, and time-sensitive decision-making, it's a helpful resource, especially when cross-border obligations start to complicate the usual processes.

What are ACH payments?

The Automated Clearing House (ACH) transfers are an electronic funds-transfer network for sending money across banks in the US. Think of it like digitizing paper checks without human involvement for B2B, government, and consumer transactions. This includes paying bills, tax refunds, delivering social security benefits, payroll, and more.

You might already use ACH transfers without realizing it—they're often called 'bank transfers,' 'direct deposits,' 'direct debits,' or 'auto-pay.' Common FinTech services like PayPal, Wise, and Venmo also use this technology.

Watch the video below to learn about local bank transfers.

Is Venmo considered an ACH?

Yes. Venmo facilitates standard bank transfers through the ACH (Automated Clearing House) system. When you select the regular (non-instant) option to move funds from your Venmo balance to your linked bank account, the transaction is routed via the ACH network, making it a typical ACH transfer behind the scenes.

Do banks charge ACH fees?

For individual account holders, standard ACH transfers are generally offered free of charge, especially for everyday activities like direct deposits or paying bills.

However, businesses often face fees for sending ACH payments. Additional costs may apply for expedited (same-day) transfers, returned transactions, or chargebacks.

Why is ACH slower than wire transfers?

ACH transfers move more slowly because they are processed in groups rather than one at a time. The ACH network batches transactions and processes them during designated clearing windows throughout the day.

In contrast, wire transfers are executed individually and often finalized on the same day since they’re processed in real time.

How does ACH payments work?

The Automated Clearing House acts as a central authority for processing bulk transfers between banks.

In the case of payroll, the company’s bank (Originating Depository Financial Institution or ODFI) sends employee payment details at regular intervals in a batch to the ACH network operator, which then distributes them to the receiving bank (Receiving Depository Financial Institution or RFDI).

The National Automated Clearing House Association regulates and oversees these transactions to ensure security and reliability. This makes ACH network a cost-effective option for bulk or recurring payments like payroll.

In 2023, ACH transfers moved $8.1 trillion USD, reflecting its maturity and trustworthiness as a payment method.

What is a wire transfer?

Sending money via wire transfer happens directly between sender and receiver banks. They use secured systems like SWIFT which facilitate information sharing for such transactions. This makes it suitable to transfer large funds in the shortest time.

There are two types of wire transfers:

1. Domestic wire transfer: Transfers funds between banks within the same country, usually within a few hours.
2. International wire transfer: Sends money between banks across different countries within a few business days. You require SWIFT codes and currency conversions.

Note that the sender of a wire transfer pays a transaction fee, with no federal limits on how much banks can charge.

Is Zelle a wire transfer?

No, Zelle does not use wire transfer rails. It relies on the ACH network to facilitate payments between banks. However, because Zelle is integrated directly with many banking platforms, it often allows near-instantaneous transfers, even though it technically operates on ACH infrastructure.

How do wire transfers work?

Wire transfers move funds by sending payment instructions, not physical money. 

For example, the sender pays upfront with fees, and the sending bank uses a secure system to send payment instructions to the receiving bank. Using these instructions, the receiving bank deposits its reserve funds into the correct account number. Then, both the sender and receiving banks settle the payment on the back end.

How do I know if a transfer is ACH or wire?

To identify the type of transfer, look for clues in the transaction details or your bank statement:

ACH transfers

• Often labeled with terms like “ACH,” “Direct Deposit,” or “Electronic Payment”
• Typically take a few business days unless it's a same-day ACH
• Common for routine transactions such as payroll, bill payments, or peer-to-peer platforms like Venmo and Zelle

Wire transfers

• May appear as “Wire,” “Wire Transfer,” or include specific bank routing information
• Funds usually arrive the same day, especially for domestic wires
• These transfers can carry higher fees and are typically irreversible

If there’s still uncertainty, your bank can verify the transfer type by checking the full transaction record.

What are the key differences between ACH transfers and wire transfers?

The difference between ACH and wire transfer depends on the financial institution involved, transaction nature, and account type. But broadly, here’s how they differ in terms of:

1. Transaction speed

How long do ACH transfers take to settle?

Since ACH transfers occur in batches (i.e. not instantaneous), standard ACH transfers may take a few banking days to complete a transaction.

Some banks offer same-day ACH transfers from business to the recipient's bank, usually at additional costs.

How long do wire transfers take to settle?

Domestic wire transfers are typically completed within a few hours or the same day if done by the bank's cutoff time. Larger domestic checks and international transfers may take multiple business days.

2. Transaction costs

How much does ACH payment processing cost?

ACH payment processing fees vary depending on the provider, the bank, and the specific commercial terms in place. Costs can also differ based on factors such as transaction volume, business agreements, and the type of payment being initiated. Because of this variability, businesses should refer to their service provider or banking partner for the exact fee structure that applies to them.

How much does a wire transfer payment cost?

Wire transfer fees also differ widely between financial institutions and payment processors. The final cost is influenced by the bank used, whether the transfer is domestic or international, and the contractual terms of your payment service. For accurate and up-to-date fee information, companies should consult directly with their provider or banking institution.

3. Security and fraud prevention

ACH and wire transfer are safe—but scammers or hackers are getting smarter. While the technologies are safe, external risks like social security number leaks in the USA increase vulnerabilities.

How secure and reversible is an ACH payment?

ACH transfers are reversible and can be stopped or canceled if the bank finds risk or the initiator wants to cancel the transaction. This happens after detailed verification and scrutiny as per Automated Clearing House’s regulations.

How secure and reversible is a wire transfer payment?

Once you send a wire transfer, it is often irreversible and difficult to retrieve funds if you make any errors. This makes it a favorite tool for scammers—for example, you may have heard of fake contests or inheritance email scams that ask the victims to wire transfer the money.

Because of this, wire transfers are subject to scrutiny from banks or authorities, requiring proof of authorization or identity documents.

4. Availability and accessibility

ACH transfers are limited to US banks and financial institutions. On the other hand, you can send remittances across the globe using wire transfers.

What are ACH transfer schedules and funds availability?

The National Automated Clearing House Association (Nacha) controls the batch processing of transactions for both sender bank (OFDI or (Originating Depository Financial Institution) and receiver bank (RDFI or Receiving Depository Financial Institution) according to the below official schedule:

You can check Nacha’s guidelines on ACH funds availability and schedule timings to align your transactions.

What are wire transfer schedules and funds availability?

Wire transfers are your best option for international payments, making it a valuable transaction infrastructure for businesses with global payrolls. The schedules and funds availability are subject to your bank's wire transfer processes.

What are the pros and cons of ACH and wire transfer payments for payroll?

Pros of ACH payments:

• Payroll automation: Once employees authorize direct deposit, your company can automate payroll administration for timely and consistent salary disbursement
• Convenience: Employees receive paychecks directly into their account number, avoiding bank visits
• Security: ACH is secure, regulated, and offers reversible transactions, adding a layer of protection in case of errors or payroll fraud
• Cost-effective: Low or no fees make ACH ideal for frequent payroll processing

Cons of ACH payments:

• Slow processing: It takes a few business days to process transactions, making it unsuitable for emergency payments
• Dependence on bank processing times: ACH network processes transactions in batches at specific times throughout the business day. If you miss a payroll submission, it may not get processed until the next business day, delaying employee payments
• Extra fees for same-day ACH processing: Same-day payments incur additional costs. Your company must adhere to deadlines or incur extra costs
• Compliance: To avoid penalties or legal issues, your company must adhere to ACH regulations, including obtaining proper employee authorizations
• Domestic use only: Being limited to US transactions complicates global payroll needs

Pros of wire transfer payment:

• Global reach: Wire transfers enable companies to hire and retain international talent Payroll software like Deel helps digitize and streamline these international payroll processes. This helps tap into diverse talent and expand the company overseas
• Reliable: Ideal for large transactions to facilitate paying high salaries or bonuses
• Speed: Quick processing helps companies with tight payroll deadlines pay salaries on time, often within hours for domestic payments

Cons of wire transfer payment:

• High costs: Fees can add up for frequent US payrolls
• Complex setup: Requires detailed recipient information with no room for errors in account numbers. This complicates payroll setup, especially for international employees with varied currencies and local regulations
• Irreversible: Wire transfers cannot be reversed once initiated, increasing the risk of costly mistakes

Use payroll software that supports ACH payments and wire transfers for flexibility

ACH transfers and wire transfers have their strengths—you need to categorize your requirements depending on transaction size, frequency, urgency, and budget to decide accordingly.

To simplify the choice between ACH vs wire transfer, use flexible payroll management software like Deel Payroll to help you streamline your employee payroll processes. Global teams use Deel to automate payroll administration and employee onboarding across nations.

With Deel, you can consolidate HR operations for better visibility, all while you work to expand in international markets—book a demo to learn more.