SWIFT vs. Global ACH

What are the benefits of SWIFT?

Formed in 1973, SWIFT is a well-known and widely-utilized rail for moving money overseas. SWIFT network includes 11,000 member financial institutions and is the most well-established method for sending money internationally. The network does not transfer physical funds—instead, it provides a standardized way to issue payment orders via SWIFT codes.

Primary benefits include:

• SWIFT is a reliable, well-established rail. SWIFT is a trusted and well-understood method for moving money cross-border, with nearly 50 years in operation.
• SWIFT’s network is large and coverage is extensive. Offered in 200 countries and territories, with 26 offices around the world, SWIFT is widely available.
• Settlement is fast. SWIFT payments settle quickly—on average, settlement happens in 1-2 days.

While they offer speedier international transfers, SWIFT transactions are costly: between $20-$50 per transaction. Further, the exact dollar amount received by a SWIFT transfer payee can’t be fully guaranteed, since these transactions often pass through intermediary banks that may also charge a fee for handling the transaction.

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What are the benefits of Global ACH?

Global ACH has recently emerged as an alternative to SWIFT. Run across rails including EFT in Canada, SEPA in Europe, BACS in the UK, and BECS in Australia, Global ACH payments can be settled in local currency using local bank accounts.

Global ACH offers business advantages to both companies looking to streamline existing cross-border payment flows and teams building new global products. Here are the primary benefits:

• Global ACH costs less. Five to seven times cheaper than SWIFT, on average depending on your bank partner, Global ACH is much less expensive.
• Payees know precisely how much they’ll receive. With Global ACH, there are no lifting or correspondent fees provided payments are initiated in USD and settled in local currency.
• Global compliance is managed by the bank. After underwriting by a domestic bank that offers Global ACH, cross-border compliance and security is managed by that bank (not your company).

Global ACH, like every payment method, has limitations. Currently, Global ACH is credit (or push) only. Payments settle more slowly than they do via SWIFT—coverage and support for Global ACH is also more limited.

When is SWIFT a good choice?

There are several instances when moving money via SWIFT makes sense:

• For companies sending large payments globally. SWIFT is also useful for payments to well-known counterparties (which may be recurring).
• When a recipient is not sensitive to fees. For large payments, SWIFT fees may feel relatively insubstantial to recipients.
• When speed is a higher-priority than cost.

When is Global ACH a good choice?

When deciding between SWIFT vs. Global ACH, the latter makes sense in the following instances:

• For companies performing a high volume of low-value payouts globally.
• When a recipient may be sensitive to fees. In these cases the reduction or elimination of fees can greatly improve customer satisfaction.
• When low cost is a higher priority than immediacy.