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An International ACH Transfer—also known as Global ACH or Cross-Border ACH—is a cross-border payment made from a US-domiciled account that settles on an ACH-equivalent rail.
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.
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ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks in the United States.
ACH APIs enable companies with high transaction volumes to write software that automates payments over the ACH network.
An ACH credit refers to the process of electronically depositing, or “pushing,” funds into a bank account using ACH.
In an ACH debit, funds are electronically withdrawn, or “pulled,” from a bank account using ACH.
A Notification of Change (NOC) is used to notify the sender of an ACH payment to correct or change information related to a customer’s bank account.
A return is a credit or debit entry initiated by the Receiving Depository Financial Institution (RDFI) that returns a previously originated payment to the Originating Depository Financial Institution (ODFI).
ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier to spot and resolve payment failures.
An ACH reversal refers to an erroneous ACH payment that a payment originator requests to take back, or reverse.
Credits and debits are two kinds of ACH transactions. Whereas a credit involves depositing, or “pushing,” funds into a bank account, for a debit, funds are withdrawn, or “pulled,” from an account.
FedACH is the automated clearing house (ACH) service of the Federal Reserve Banks.
Part of the FedACH system, FedGlobal ACH offers low-cost and efficient cross-border ACH payments.
The two kinds of financial institutions in the ACH network are ODFIs (Originating Depository Financial Institution) and RDFIs (Receiving Depository Financial Institutions).
A Standard Entry Class or SEC code is a three letter code that describes how a payment was authorized by the consumer or business receiving an ACH transaction.
US companies moving money internationally will likely weigh the pros and cons of SWIFT vs. Global ACH when it comes to attributes like speed and cost.
ACH (Automated Clearing House) is a payment processing network that’s used to send money electronically between banks and financial institutions in the United States.
An electronic funds transfer (EFT), also known as a direct deposit, is the digital transfer of money between bank accounts. As digital transfers, they reduce the need for manual input and paper documents.
Global ACH can help companies move money from US-domiciled accounts across borders using local rails. Learn how and when to use this payment rail.
A Request for Payment (RFP) is an ACH Network message that can be used by businesses to send electronic invoices to their customers.
Same-Day ACH is an improvement to the ACH network that allows the processing of credit, debit, and return transactions several times a day.
A pre note or prenotification is a zero dollar payment to validate the account and routing details of a bank account before debiting or crediting it.
An International ACH Transfer—also known as Global ACH—is an ACH payment made cross-border from a US-domiciled account.
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