International ACH transfers explained

If you need to send some money overseas or settle an overseas invoice, you might be considering using an ACH payment. ACH transfers are easy and cheap within the US — but what about ACH international payments?

This guide has all you need to know about ACH transfers — including ACH international transfer processes, and providers. You'll also read about Wise and how you can save money when making international transfers.

What is ACH bank transfer?

ACH stands for Automated Clearing House. In the US, ACH payments are managed and overseen by Nacha¹.

ACH bank transfers cover several common types of payments, including direct deposits, bill pay and e checks. Chances are you get paid through ACH, and may also pay many of your household bills this way.

In an ACH payment, the payer will instruct the bank to make a transfer, which will then be processed later in a batch with other payments, at a set time. That cuts costs and makes the system manageable for banks.

ACH payments are popular because they’re cheap and easy to initiate. They’re not usually the fastest means of getting money from one account to another, but they’re reliable and can be used for bulk payouts, like running payroll.

However, they’re typically limited to US use only — although the availability of cross-border ACH payments is improving all the time. More on that later.

Check out our full guide on what is ACH

Can ACH be used for international payments?

Yes. It is possible to send international ACH payments, In fact, in 2023, Nacha reported over 122 million international payments, which were worth a combined total of over 248 billion USD².

The main barrier to sending international ACH payments is that not all banks can offer this service just yet. You’ll need to double check with your own bank whether or not international ACH transfers are available for retail customers before you start to process your payment.

Alternatively, you can use a specialist provider like Wise, to fund an international transfer by local ACH, and have the payment converted and sent on to someone overseas. This process can be fast — even instant — and usually costs a lot less than a bank international wire. We’ll look at that more later.

How does an ACH international transfer work?

The ACH network is primarily involved in offering USD transfers between bank accounts within the US. However, it can also process international payments by working with the clearing house in the recipient’s own country.

When you send an international ACH, your bank and Nacha will work with the correct clearing house, based on the details of your payment, to have your money deposited into the recipient’s account wherever that is held.

You’ll simply need to select the international ACH option when you set up your payment and follow your own bank’s processes. There’s more on how to make an international ACH coming up a bit later.

What is ACH IAT?

The finance industry loves an acronym. However in this case, it can get pretty confusing, as there are a couple of different — but similar sounding — phrases and acronyms used when talking about sending money overseas.

We’ll look at this closely next, but it’s important to know that there’s a difference between an ACH international transfer (sending money overseas) and an ACH IAT — which is the reporting process carried out by banks in the background when money is sent internationally. Read on for more on how this works, and why.

What is the difference between ACH international transfer and international ACH transaction?

It’s helpful to know that there’s a difference between a global ACH or international ACH transfer and an International ACH transaction (IAT)³.

As a consumer you can send a global ACH or international ACH transfer. But you won’t be involved in the IAT, which describes the reporting requirement for banks and providers involved in sending money internationally.

The good news is that all IAT requirements are completed by the bank facilitating the transfer, so all you need to worry about is finding a provider to offer a global ACH to the country you need.

Finding a bank to send your international ACH transfer may require a bit of research. Ask your bank if they cover your destination country, as not all countries are always covered. US Bank⁴, for example, offers cross-border ACH payments for businesses, but only to Canada, Mexico and select European destinations.

Pay for your international transfer via ACH with Wise

Most US banks can’t support international ACH transfers. Wise has a solution.

Arrange a Wise payment online or in the Wise app, to any of 70+ countries, and pay using a local ACH credit or debit, in dollars. Wise will then pay out the agreed amount and currency, directly to your recipient’s bank account in the destination country.

Wise is an international money transmitter specialist which built its own payment network to make transfers overseas cheaper and faster — over 60% of Wise payments are instant, and you could get lower fees and a better exchange rate compared to your bank, too*.

Get started with Wise

Note: transaction speed claimed depends on funds availability, approval by Wise’s proprietary verification system and systems availability of our partners’ banking system, and may not be available for all transactions

💡 Wise also offers a business account, if you need to make international business transfers

Some key features of Wise Business include:

Better visibility and organization of business finances. This is helpful for account reconciliations and audits Major local account details for a simple one-off fee to receive international payments with ease No monthly account fees or minimum balance requirements Receive payments from e-commerce platforms such as Amazon or via Stripe Create invoices using the free Wise invoice generator or invoice templates Accounting integrations, including a QuickBooks Bill Pay connection Batch payment options. Fast payment of up to 1,000 people

Discover the difference betweenWise Business vs Personal

Making an international ACH payment: step by step

Here’s how to send an international ACH if your bank facilitates this.

Step 1: Get your recipient’s local bank details

Exactly what’s needed from your recipient depends on where you’re sending the money, as local legislation might require additional details. Here’s an overview of what’s normally needed:

Your recipient’s full name as it appears on their bank account. Your recipient’s local bank account number. Routing number equivalent (if applicable), like a BSB code in Australia, an IFSC code in India, a Sort code in the UK, and Institution and transit number in Canada. Recipient address.

Step 2: Log into your online banking account

If your bank allows you to send international ACH transfers, the easiest way is likely to be through your online or mobile banking system.

Log into your account and navigate to the payments area. Here you’ll be able to select international or global ACH transfers if they’re available as a payment option.

Step 3: Enter the transaction details

Follow the onscreen prompts to enter the details of the payment, including your recipient’s information, the amount and currency.

You may also be able to enter a message for the recipient, or add their email address so they're notified of the payment.

Step 4: Check everything over, complete your bank’s security step and confirm

Your own bank may need you to complete verification at this stage for security. Check everything over, including all the details you’ve entered for the recipient, and then confirm once you’re ready.

What information is needed for an ACH transfer?

To send an ACH transfer you’ll need to gather information about your recipient, including:

• Their name and address

• Their bank account number

• Their bank routing and ABA number

Depending on the details of the payment, and your own bank’s process, you may also need additional information like the bank branch address.

Is a BIC number required for an international ACH transfer?

The exact information needed for your ACH payment will depend on your own bank, the destination country and currency, and the recipient’s bank processes. Check with your bank before you initiate the payments so you’re sure you have all the information needed.

What’s the difference between international ACH vs wire transfer

ACH and Wire are different. ACH payments aren’t usually the fastest way to move money — but they are secure and cheap. That makes them great for domestic transfers like paying bills and running payroll.

Wires are faster as they’re processed individually and sent straight from the sending bank to the receiving bank. Typically, however, there are much higher fees associated with wires — be they domestic or international. That makes wires a top choice for urgent or high value transfers, at home or abroad.

Here are some key differences between ACH payments and bank wire transfers.

Feature comparison	ACH Payment	Bank wire transfer⁵
Domestic vs. international payments	Almost entirely used for domestic transfers, although international transfers are becoming more common	Used for both domestic and international payments via the SWIFT system
Price to send	Often free, or under 3 USD per transaction	Wires cost 35 -50 USD depending on destination
Price to receive	Usually free	Banks charge and average or 15 USD to receive international payments made using SWIFT
Speed	1-2 business days for domestic ACH payments	Domestic payments often within the hour, international swift payments timeframe 1-5 business days
Used to deduct from your account	Yes	No
Used to send money out from your account	Depends on the bank	Yes
Used to deposit money into your account	Yes	Yes

Still not sure of what’s the best type of transfer for you? Learn more with our ACH vs Wire comparison guide

How much does an international ACH cost?

One of the benefits of ACH payments is that they’re generally cheaper than using a bank wire. However, the exact costs do vary from bank to bank, so you’ll need to review your account terms and conditions to see exactly how much you’ll be charged for an international ACH.

How long does an international ACH transfer take?

ACH payments can be settled in a day or two, but the exact time it takes for your money to arrive will depend on a range of factors including the country and currency, and the recipient’s bank processes.

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While international ACH payments aren’t yet widely available for retail customers, they’re getting more common among US banks. It’s worth checking with your own bank to see if they’re able to process international ACH transfers yet, as this can be a cheaper way of moving your money compared to using a bank wire — the usual solution from traditional banks.

Alternatively — and for a payment which can be both cheaper and faster compared to your bank — check out alternative providers like Wise, which can offer international transfers funded by local ACH payments here in the US.

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Sources:

1. NACHA
2. NACHA - international ACH volume 2021
3. NACHA - IAT
4. US Bank - International business payments
5. Bank rate - Wire transfer fees

Sources checked on 07.22.2024