RTGS, ACH, SWIFT - What are they ?

ACH, RTGS and SWIFT are payment systems that facilitate the transfer of money from one bank to another.

ACH = Automated Clearing House
RTGS = Real Time Gross Settlement and
SWIFT =Society for Worldwide Financial Telecommunications

A thread

ACH – This method, facilitates payments between banks and financial institutions. Local banks can send amounts lower than J$1M only through this method. It is cheaper than RTGS and is done in batches twice per day, with cutoff times for transactions.

RTGS as the name suggests, facilitates immediate payment of transfers initiated from one financial institution to the other. RTGS payments are usually credited within hours and can facilitate amounts of any size. It is more expensive (ACH is about $20 vs RTGS about $200).

Costs differ across banks but the cost for ACH is usually born by the sender, RTGS also by the sender and sometimes the receiver as well depending on the bank.

As I mentioned in my last tweet you can put a description in RTGS transactions but you can’t with ACH transactions.

Another payment method is SWIFT, which is actually a messaging system. It is the oldest of the three payment methods and was founded to facilitate payments across the world. SWIFT provides banks with Bank Identifier CODES (BIC) aka SWIFT codes...

..to identify payments across the 11,000+ participating banks and financial institutions in 200 countries. Sometimes SWIFT transactions require an intermediary bank will be required to complete the payment to the destination the funds are intended to go to.

Your bank will give you specific instructions on how to wire money based on the country the money is destined to go to.
They will also need the bank account of the bank that funds are being transferred to, the bank routing number and the currency you want the funds to arrive in.

SWIFT is what is associated with wire transfers which are the most expensive of the three ($3,000+ dollars depending on the bank). SWIFT transfers are usually same day or next day. Costs usually born by both sender and receiver.

Here is a table comparing all three methods: