After confirming payment terms with a US client, you will typically receive your payment via wire transfer or ACH. While both options let you receive USD from a US bank account, they share little in common. How the money moves, how much it costs, and how long it takes vary significantly.
Understanding the differences and which option is more affordable is important if you want to keep more of your earnings. For anyone receiving USD from international clients or platforms, this article compares wire transfers and ACH payments to help you decide which is cheaper.
A wire transfer is a direct instruction from one bank to another to initiate a transaction. When your US client wants to pay you:
Total deductions can range from $30–$75, plus $25–$45 charged by the sender’s bank. Hence, the exact fees are often unpredictable until the money arrives. It is usually difficult to tell how many banks will be involved in a wire transfer. It depends on the specific institutions, the currencies involved, and the destination country.
ACH stands for Automated Clearing House. It is an electronic network that operates entirely within the US banking system. When a US client sends money to your USD account via ACH, the funds move from their bank to yours via the network.
Unlike SWIFT, ACH is not a messaging system, and money is not being passed through different banks. This means:
Many banks now offer same-day ACH, meaning you can receive your payment within a few hours.
If it is that straightforward, why doesn’t every global remote worker use it?
The problem is that ACH only works within the US banking system. For a client to pay you via ACH, you need a USD account with a US routing number and account number. Without those details, ACH is not an option, regardless of how much both parties would prefer it.
Also read: Digital banks vs traditional banks for non-US residents
The difference between wire and ACH becomes more real when you apply it to an actual transaction. So, let’s use some numbers to illustrate.
Let’s say you have sent a $1,500 invoice to a US client and are expecting payment.
Using international wire: your client’s bank charges $35 to initiate the transfer. One correspondent bank deducts $20 in transit. Your receiving bank may charge an inward transfer fee of $10 to $15. The total deducted from that $1,500 before it reaches your account is $65 to $70, close to 5% of the invoice amount.
Using ACH to a virtual USD account: your client pays nothing or a nominal fee under $1. No correspondent banks are involved. The full $1,500 lands in your account, or, let’s say, $ 1,499. Your payment platform may charge a deposit fee, typically 0.35% to 1%. There might be a flat fee for withdrawing the money to your local bank. Total cost on your end: $5.25 to $15 on a $1,500 payment, or 0.35% to 1%.
On a $1,500 transaction, that is a difference of $50 to $65. On $1,500 received monthly, that is $600 to $780 in avoidable costs per year.
Here is a table comparing ACH and wire transfers:
If ACH is cheaper and more predictable, you might wonder why anyone still uses wire transfers for international payments. ACH works only in the US. If your client’s bank is in the UK, Germany, or Japan, they cannot initiate an ACH transfer regardless of what account details you provide. For those clients, SWIFT wire is the only direct bank-to-bank option.
For US clients, wire transfers are often used for large transactions, with higher fees accepted as a cost of doing business. For regular freelance or consulting payments of $1,000 to $5,000, wire transfers are rarely the better choice when ACH is available.
Also, some international companies have rigid payment structures built around wire transfers, which can be an administrative hassle to change. They might stick with the traditional wire transfer, which they are more familiar with.
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Opening a traditional US account requires having a US address and a Social Security Number or an Individual Taxpayer Identification Number. This might not be possible if for a Filipino developer working with a San Francisco startup, a Kenyan designer invoicing a Boston agency, or an Indian consultant serving US clients.
How then can you get a US routing number and account number for ACH transactions?
Virtual USD accounts issued by regulated fintech platforms solve this directly. When you open a virtual USD account through a platform like Grey, Wise, or Raenest, you get a real US routing number and account number from a US banking partner. These details are similar to those for any other US bank account. Your client initiates an ACH transfer from their end, the funds move through the ACH network, and they arrive in your virtual account without any intermediary bank taking a cut.
Also read: Virtual US accounts explained: who they work for
Grey gives freelancers, consultants, and remote workers virtual USD accounts with real US routing numbers and account numbers that accept ACH transfers directly. The deposit fee on Grey’s USD account is 0.8% of the amount received, capped at $10. You can keep the USD in your account or convert to your local currency at mid-market exchange rates. Grey shows you the exact cost of each transaction and accounts for any deduction. Its multi-currency feature makes it easy to manage GBP and EUR on the same platform.
With a virtual USD bank account, you can now receive ACH payments and maximise your earnings. Sign up on Grey and download the app to get your USD account details today.
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