If you are not a financial specialist, it is difficult to know what kind of online payment methods to choose. The most popular options out there seem to be ACH payments and wire transfers, the question is, what is the difference between the two. Here is all the information you need to know about such payment systems.
Both payment methods are there to transfer money from one account to another, but the way they do it is different.
ACH transfers use the automated clearinghouse as an intermediary while wire transfers are done directly between the two accounts. The most widely used option for online marketers and merchant processing is the ACH or Automated clearinghouse option. This type of transfer does take a little longer to process, but they are a lot cheaper than wire transfers.
Wire transactions, on the other hand, are more expensive but don’t have any type of cross-border payment limitation. If you have an international business, this could be the solution for you.
When choosing between the two, think about the costs involved and timing. If you need a fast transfer go for a wire transfer and if you are looking for a cheaper version, ACH is the way to go.
Also, if you are an online retailer, you might be interested in setting up a merchant account to go with your payments. Check out the graphic below to learn more details about the collection agency merchant account.