SWIFT vs. ACH Transfers
Both SWIFT (Society for Worldwide Interbank Financial Telecommunication) and ACH (Automated Clearing House) are payment transfer systems, but they differ significantly in cost due to their structure and purpose.
SPECIAL NOTE: There is a difference between ACH payments, and SWIFT wire transfers. EntirelyDigital accepts both, but as ACH payments are typically WITHOUT fees, customers should use this form of payment. Any fees incurred as part of any electronic payments will be added to customer's accounts.
ACH Transfers (Domestic, U.S.-Based)
Purpose:
- Used for domestic bank-to-bank transfers within the United States.
- Commonly used for payroll, bill payments, direct deposits, and business transactions.
Fees:
- Lower fees, often free or under $3 per transaction for standard ACH payments.
- Some banks charge $5 to $10 for expedited ACH transfers.
- No intermediary banks involved, so fewer hidden fees.
Speed & Processing:
- Standard ACH takes 1-3 business days (can be same-day for a slightly higher fee).
SWIFT Transfers (International Wire Transfers)
Purpose:
- Used for international money transfers across banks in different countries.
- Supports various currencies and banks globally.
Fees:
- Higher fees due to multiple intermediaries (correspondent banks).
- Typically ranges from $10 to $50+ per transaction, depending on banks and countries involved.
- Banks may charge separate fees for sending, receiving, and intermediary processing.
- Currency exchange rates often have a markup, adding hidden costs.
Speed & Processing:
- Usually takes 1-5 business days, depending on country, bank, and time zones.
Key Differences in Fees
| Feature | SWIFT Transfer | ACH Transfer |
|---|---|---|
| Fee Range | $10 - $50+ | Free - $3 (standard), up to $10 (expedited) |
| Hidden Costs | Intermediary bank fees, FX markups | Minimal, typically flat fees |
| Intermediary Banks | Yes (multiple) | No |
| Primary Use | International payments | Domestic U.S. transactions |
Which Is More Cost-Effective?
- For international payments: ACH is not an option; SWIFT is necessary but costly.
- For domestic U.S. payments: ACH is far cheaper and more efficient than SWIFT.
If you’re sending frequent international payments, alternatives like Wise or direct bank agreements may reduce SWIFT fees.