Cross-Border Commerce

Real-Time Payments (RTP) vs Wire Transfers vs ACH

Efficiently moving money between accounts and banks plays a crucial role in the modern business landscape. Whether it’s for payments to suppliers, workers or other beneficiaries, the choice of payout method significantly impacts your business’s costs, cash flow and the effort you spend managing payments.

In this article we’ll compare three popular methods for sending B2B and B2C payments: RTP, Wires and Global ACH.

Real-Time Payments

Real-time payments (RTP) enable the immediate transfer of funds between banks, offering unmatched speed and efficiency. RTP systems are designed for 24/7 availability, providing instant confirmation of payments and funds availability. This immediacy is ideal for time-sensitive transactions and improving cash flow. Because these payments are irreversible, they provide an instant confirmation of funds that can help protect businesses from fraud. Messages and payment notifications are also sent in a standard format enabling merchants to automate reconciliation.

While RTP has many advantages, there are a few potential drawbacks. Being irreversible provides greater peace of mind for the seller but removes the buyer’s ability to reclaim funds for legitimate disputes. Adoption and interoperability are also limited.

If you’re not doing business domestically in a country with an RTP network or you need to send money via multiple networks, you’ll need to work with a global disbursement solution like Rapyd, which connects you to multiple RTPs through a single integration.

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Wire Transfers

Wire transfers send funds across a network of banks or transfer agencies around the world. Wire transfers and wire transfer companies are relied on heavily for cross-border disbursements. 54% of cross-border businesses used wire transfers to send funds in 2023. Yet only 19% of businesses said they preferred sending money using this method. That’s because wire transfers come with higher fees and there is a chance they could be unsuccessful due to insufficient funds. They also provide limited messaging which makes reconciliation and reporting more of a challenge.

Global ACH Transfers

Global ACH, and the United States’ ACH system, facilitate cross-border payments while adhering to the standards set by the National Automated Clearing House Association (NACHA). The European system, known as SEPA (Single Euro Payments Area), encompasses 36 countries. Despite these regional efforts, banking practices still vary significantly across countries, which can make it challenging to leverage the benefits of local clearing at global scale.

Global ACH Transfers are popular for their cost-effectiveness and they are widely used for sending batch payments, including payroll, bill payments, and peer-to-peer transactions.

While they offer cost-effectiveness, global ACH transfers have drawbacks. These include longer processing times, transaction limits and the potential for reversals that leave businesses vulnerable to fraud.

Which Is Better

All three methods for sending payments have their uses. There’s no winner, but there is a best choice for each transactional use case. The chart below compares the features and capabilities of RTP, Wires and Global ACH transfers to help you choose the best payout method for your needs.

ACH vs RTP vs Wires

	ACH	Wires	RTP
Settlement	1-3 Business Days	1-3 Business Days	Instant / Real-Time
Reversals	Reversible	Irreversible	Irreversible
Funds Availability	Could be denied (due to insufficient funds)	Could be unsuccessful (due to insufficient funds)	Instant confirmation (by sending bank)
Cost per payment	$0.20 – $1.5¹	$25-$50	$0.25 – $1
Messaging with payment	Limited	Limited	Enhanced
Coverage	Every bank	Most banks	Some banks²

Settlement Time: Settlement time varies across the three options.

RTP provides the fastest settlement time with near-instant transactions, making it suitable for scenarios requiring immediate funds verification. Wire transfers offer a quicker settlement compared to Global ACH, making them suitable for more urgent domestic and international transactions. Global ACH, while cost-effective, has a longer settlement time and is better suited for routine, non-urgent transactions with trusted parties.

Reversals: Reversals are like a payment ‘undo’ button. RTP and wire transfers are generally irreversible. Individuals and merchants who have problems with ACH payments can stop or reverse them, which makes this transfer method more susceptible to some forms of fraud and a poor choice for transactions where goods cannot be recovered.

Funds Availability: Need confirmation of funds? RTP checks for funds availability in real-time before processing the transaction and provides instant confirmation. Both ACH and wires may be unsuccessful due to insufficient funds.

Cost per Payment: ACH will generally cost between $0.20 – $1.5, wires are in the range of $25-$50, and RTP transactions typically cost between $0.25 – $1.

Messaging with Payment: Messaging with payment refers to the communication or information exchange that accompanies a payment transaction. RTP typically offers more advanced messaging capabilities, allowing for a richer exchange of information and easier reconciliation.

Coverage:

About 56 countries currently have RTP networks and adoption is highest in Asia and Latin America. Many of these networks are not interoperable. However Bilateral and multilateral connections between real-time payments systems do exist such as the PayNow-UPI linkage between Singapore and India.

While Global ACH transfers are widely supported, the complexities involved in dealing with multiple banking systems and regulations means that sending bank transfers internationally without a unified payout platform can be complex. Wire transfers are widely available and supported by most banks.

The Choice Is Yours

The choice of disbursement method should align with the specific needs and scope of the transaction in terms of geography, costs, speed and security.

Optimise Every Transaction with Rapyd

Navigating the global payouts landscape can be complex. With Rapyd Disburse you can choose the right payout method and currency for every transaction from our unrivaled global network.

Reach 190+ countries with bank transfers, real-time payment networks, card payouts and third-party ewallets.

Rapyd helps you master global payouts.