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.
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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|
Yes. It is possible to send international ACH payments, In fact, in 2021, Nacha reported over 100 million international payments, which were worth a combined total of well over 200 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 regular bank international wire. We’ll look at that more later.
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.
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.
Global ACH transfers are technically possible these days, but only select US banks have a system in place that’s able to provide international ACH services. If your bank can’t facilitate an overseas ACH, you can save when you send your money overseas, by choosing a specialist like Wise.
Wise processes international payments through its own payment network. That means you can fund your transfer with a local USD ACH transfer, and Wise will pay out from their account in the country and currency you need, with the real mid-market exchange rate, and a low, transparent fee⁶. Because no money actually has to cross any borders, it’s also super fast — 45%+ of Wise payments are instant⁷.
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 10-50 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|
Here’s how to send an international ACH if your bank facilitates this.
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:
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.
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.
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.
To send an ACH transfer you’ll need to gather information about your recipient, including:
Depending on the details of the payment, and your own bank’s process, you may also need additional information like the bank branch address.
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.
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.
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.
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.
- NACHA - international ACH volume 2021
- NACHA - IAT
- US Bank - International business payments
- Bank rate - Wire transfer fees
- The speed of transaction claim 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
Sources checked on 08.26.2022
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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