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Is ACH safe enough? ACH transfers vs check payments, wire transfers and credit cards

In previous article, I explained how ACH works, so you can read this article in order to understand its basics.

But in this article I want to speak about ACH safety. In short words ACH has a high level of security than any other way you can conduct a payment, because all operations are standardized and protected under federal law (or any other laws in your country).

First of all, you should understand what is ACH. In case you don’t want to read a full article about ACH – here’s the main point.

ACH (Automated Clearing House) is a network that coordinates electronic payments and automatic money transfers. It consists of bank-sender, Clearing House (which can be a Federal Reserve in the US or any other specific Clearing House) and bank-receiver.

There are 2 types of transactions that can be done: debit and credit.

ACH debit is withdrawal from a bank account.

ACH credit is a process of sending founds to a bank account.

Now, when you understand what’s ACH, we can proceed to talking about it’s safety.

Is ACH safer than check?

In short words, yes, it is. At least ACH transfers are much safer than writing a check because it’s more confidential and the chance that such payment can be rigged is near to zero.

To perform ACH transfers you need to fill your banking information only once, when, for example, when writing a check, you need to fill it each time when you want to perform a transfer. So, this significantly increases the level of security.

Also, don’t forget that check can be stolen, lost, or something else. On another hand, an ACH transfer is a direct payment, that moves money from one bank account to another without any additional operations. So this also increases the security level.

If you’ve found any fraud, error or other mistake, you can report a bank and get your problem handled. The only catch is that in almost all countries (including the US), you have only 60 days to do that.

Which is safer ACH or wire transfer?

In this case, ACH is also safer and that’s why. ACH transfers, unlike wire transfers, are irrecoverable, so there’s no case when you will get money for sth, and then the sender will demand the money back (and probably they can get it).

ACH transfers are also immediate, which means that you receive money very fast, without waiting for some time.

Also, don’t forget that for ACH transfer, the recipient provides enough information about his identity, so in case of any fraud actions, that mean it’s easier to identify the fraudster in case you’ve faced any problems or illegal activity.

Is ACH safer than credit card?

Also, ACH transfers are even more secure than credit card payments. First of all, it’s fully automated, so the chance that you will make a mistake when filling receiver’s information is much lower.

However, credit card payments are also secure enough (much more secure than wire transfers or writting a check). But don’t forget that fees for ACH transfers are much lower (around 0.3%, while an average credit card fee is around 1.5-3%).

All in all, I can’t say that ACH transfers are far more secure than using a credit card, but at least it’s fully automated and you will save some money on the transaction fees.

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