ACH vs SWIFT: What's the Differences and How to Choose the Best Payment Method for Your Business

What is ACH?

Key Features of ACH:

• Cost-Effective: ACH transfers typically have lower fees compared to other methods, often costing just a few cents per transaction.
• Batch Processing: Transactions are processed in batches, which can result in delays of 1-3 business days.
• Domestic Focus: ACH is primarily designed for U.S.-based transactions, requiring an ACH routing number to identify the receiving bank.
• Use Cases: Common for payroll, vendor payments, and recurring bills like utilities or subscriptions.

What is SWIFT?

Key Features of SWIFT:

• Global Reach: SWIFT operates in over 200 countries, making it ideal for international transfers.
• Real-Time Processing: Unlike ACH, SWIFT transfers are processed individually, often settling within the same day or 1-2 business days.
• SWIFT Code: A unique code (8 or 11 characters) that identifies a specific bank and branch for international transfers.
• Higher Costs: SWIFT transfers typically incur higher fees, including sender, intermediary, and recipient bank charges.
• Use Cases: Ideal for cross-border payments, such as international business transactions or personal remittances.

ACH vs SWIFT: Key Differences

ACH vs Wire vs SWIFT: Where Does Wire Transfer Fit?

Key Points:

• ACH: Slow, low-cost, batch-processed, domestic-focused.
• Domestic Wire: Fast (same-day), higher cost, used for urgent domestic transfers.
• SWIFT: Fast, higher cost, designed for international wire transfers.

ACH Routing Number vs SWIFT Code

• ACH Routing Number: A 9-digit code used to identify U.S. banks for ACH transactions. It ensures funds are directed to the correct bank for domestic transfers.
• SWIFT Code: An 8- or 11-character code (e.g., BOFAUS3N for Bank of America) used to identify banks globally for SWIFT transfers. It includes details like bank code, country code, and branch code.

ACH vs SWIFT Transfer: Which Should You Choose?

• Use ACH if: You’re making a domestic, non-urgent payment and want to minimize costs. For example, paying a U.S.-based freelancer for regular work.
• Use SWIFT if: You need to send money internationally, especially for time-sensitive or high-value transactions, like purchasing goods from an overseas supplier.

Example Scenario:

ACH vs Wire Transfer vs SWIFT: A Holistic View

• ACH: Best for low-cost, domestic, non-urgent payments.
• Wire Transfer (Domestic): Ideal for urgent, same-day domestic transfers but with higher fees.
• SWIFT: Essential for international transfers, offering speed but at a higher cost due to multiple bank fees and exchange rates.

Introducing PhotonPay: Streamlining Global Payouts

Key Features of PhotonPay:

• Extensive Global Coverage: Facilitates payments in more than 60 currencies across over 230 countries and regions, enabling businesses to reach payees worldwide regardless of transaction size. Supports mass payouts that can be completed within one working day.
• Competitive FX Rates: Provides bank-beating foreign exchange rates, helping businesses avoid hidden fees and reduce transaction costs.
• Customizable Workflows: Allows businesses to create separate accounts for each entity and set up multi-layered approval workflows for enhanced control.
• Fraud and Risk Mitigation: Incorporates KYC, AML, and fraud prevention processes, backed by a regulated and audited platform recognized by global regulators.
• Account-to-Account Payouts: Enables faster transfers (from days to seconds) with like-for-like settlement, minimizing high exchange fees and reducing costs.
• PhotonPay Card: Supports online and offline transactions via the Mastercard/Discover® Network, suitable for businesses of all sizes. Cards can be managed from a single dashboard with real-time spending visibility, clear payment trails, and 3D Secure authentication to minimize fraud. Multi-currency settlement helps save on FX fees.

Conclusion