What is an International ACH Transfer?

What is an International ACH Transfer?

To facilitate payments from US-domiciled accounts to accounts in other countries, an International ACH Transfer (aka Global or Cross-Border ACH) utilizes the local equivalents of ACH in different regions. This includes EFT in Canada, SEPA in Europe, BACS in the UK, or BECS in Australia. Settlement times for International ACH Transfers vary, depending on the payment rail being used outside of the US.

Though an International ACH Transfer is a slower option to move money cross-border than a SWIFT transfer, it is also cheaper—typically costing only a few dollars per transfer (and, in some cases, may even be free depending on where you bank).

Let’s look at an example of a Global ACH/International ACH Transfer in action. Marco Mercantile, a used goods marketplace needs to pay one of its marketplace vendors in Europe. They have a bank account at JPMorgan, a US bank, and they use Modern Treasury.

Marco Mercantile uses Modern Treasury to create a payment order for their vendor in Europe. From there, they can see the current exchange rate between dollars and euros before the transaction is sent—which guarantees that Marco Mercantile knows exactly how much money they are sending in USD and exactly how much their vendor will receive in EUR. Once the payment is initiated, Marco Mercantile can then track and reconcile the payment just like any other transaction—though the payment itself will be sent from the ACH Network to SEPA.

For customers that use Modern Treasury, Global ACH/International ACH Transfers can be initiated and reconciled just like any other payment, using our website or app. Currently, Modern Treasury supports Global ACH/International ACH for accounts held at JP Morgan Chase, Silicon Valley Bank, and Goldman Sachs.

How is an IAT Different Than Global ACH or an International ACH Transfer?

This is where things can become a bit trickier. The terms International ACH Transfer and Global ACH can essentially be used interchangeably, both describing an ACH transfer that moves money out of a US-domiciled bank account and into an account in another country in another currency.

An International ACH Transaction (IAT), on the other hand, is not the same thing as Global ACH or an International ACH Transfer. Rather, an IAT is an SEC code that designates a transaction as a cross-border ACH payment. SEC codes are attached to the ACH payment request itself and are a part of the NACHA file format associated with sending or receiving an ACH transaction. IAT is used for all Global ACH/International ACH Transfers and has replaced the previous cross-border SEC codes, PBR and CBR.