Are ACH and Swift the same?
The main difference between ACH and SWIFT is small and medium-sized firms can use ACH transfer since they are user-friendly, inexpensive, and useful for paying regular invoices. In contrast, SWIFT transfers are unfeasible and expensive for small enterprises to send money abroad. But first, what exactly do ACH and Swift do? In this article, learn about the Difference between ACH and Swift.
What is ACH?
An ACH stands for an automated clearing house, enables two parties- the sender and the recipient- to safely move money between their respective banks. Only within the united states of America is ACH used.
What is Swift(Wire transfer)?
The Society of worldwide interbank financial telecommunication, or Swift, is a global financial network that was founded in 1973 in Brussels, Belgium. It enables financial organizations all over the world to send and receive information rapidly, accurately, and securely. More than 10,000 financial institutions in 200 countries are serviced by Swift for money transfers.
ACH Vs Swift | Difference between ACH and Swift:
- ACH is an electronic fund transfer that makes payment from one bank/organization/institution/individual to another bank. Swift is a member-owned monetary cooperative network system employed by banks or financial organizations to transfer funds internationally.
- While ACH cannot transmit money internationally, it may do so domestically. From one bank to another, Swift can transfer money abroad.
- The transfer speed of ACH is relatively low because it takes 3-5 business days to transfer funds from the sender to the recipient. Under SWIFT, payments can be done immediately when in a hurry as it takes solely 1-2 business days to transfer funds from one bank to another, depending on the country in which the payment is made.
- ACH is comparatively cheaper as ACH payments are sometimes free of cost to their customers and most transactions are a few dollars at most. Swift charges a high fee to transfer funds from one bank to another bank internationally mainly due to fees taken by intermediary banks.
- Under ACH transfer, there is less fraud risk because the payment can be reversed by the sender in case there is any payment error. Swift payment cannot be reversed once the recipient has accepted the funds.
- NACHA supervises the US-based ACH network whereas CFPB offers some fraud and consumer protection to Swift.
- SWIFT funds transfer are faster in the processes as it takes only 24 hrs to complete whereas ACH can take up to 3-5 days to complete the same procedure of fund transfer.
- ACH payments are safer and more secure as compared to the wire payment or swift which takes place.
- Among two different bank accounts. The transactions done in ACH are reversible unlike in SWIFT payments.