How to ACH transfer to a Wise account?
February 26, 2024 2:59 AM Subscribe
You are a US resident who is employing a freelancer overseas for a small job (think a commission for a digital art piece). They have asked you to pay via ACH into their Wise USD account. How does this work?
I'm the freelancer outside the USA. While Wise suggests that such a payment is simple ("just supply them with your USD account's ACH and account number, and they can pay you like anyone else inside the USA"), my friends in the USA cannot seem to find such an option in their online banking. Wire transfers exist but cost around $25 USD, which seems excessive for the amount of money being paid.
A local freelancer friend has told me they've used Wise without issue -- they supplied the information Wise gave them to their clients and received the money just fine.
This is my client's first time working with an overseas freelancer, and I don't know what to tell them, since I've never lived in the USA or had a USA bank account.
Services like Venmo and Zelle are not available to me as someone who lives outside the USA. PayPal is my option of last resort, as everyone agrees their fees are egregious.
If you've made such a transfer, what has your experience been?
I'm the freelancer outside the USA. While Wise suggests that such a payment is simple ("just supply them with your USD account's ACH and account number, and they can pay you like anyone else inside the USA"), my friends in the USA cannot seem to find such an option in their online banking. Wire transfers exist but cost around $25 USD, which seems excessive for the amount of money being paid.
A local freelancer friend has told me they've used Wise without issue -- they supplied the information Wise gave them to their clients and received the money just fine.
This is my client's first time working with an overseas freelancer, and I don't know what to tell them, since I've never lived in the USA or had a USA bank account.
Services like Venmo and Zelle are not available to me as someone who lives outside the USA. PayPal is my option of last resort, as everyone agrees their fees are egregious.
If you've made such a transfer, what has your experience been?
I regularly transfer money from the US to a friend overseas and also have found Wise to be the cheapest way to do it. I don't recall the initial setup being difficult or requiring any information I couldn't find easily on my bank's website, but it's been a few years so I unfortunately don't remember all the details.
That said, it's still about $13 USD per transfer for me so your client isn't going to save a ton over that $25 wire transfer from the bank. If that's the path of least resistance it might be worth paying the extra $12 to just set up the wire transfer they know how to use and be done.
posted by Stacey at 3:43 AM on February 26
That said, it's still about $13 USD per transfer for me so your client isn't going to save a ton over that $25 wire transfer from the bank. If that's the path of least resistance it might be worth paying the extra $12 to just set up the wire transfer they know how to use and be done.
posted by Stacey at 3:43 AM on February 26
Stacey has a good point. Wise is great but it isn't free. You may want to look at their pricing page. I assume you'll have to eat that cost not your employer.
posted by vacapinta at 3:58 AM on February 26
posted by vacapinta at 3:58 AM on February 26
For smaller transactions (say, below $1000), Paypal's commissions are reasonable. They charge a percentage, so a $100 transaction would incur $2.99 in FX fees. I would just use Paypal if it's a one-off and/or if the amount is low.
Alternatively, your client could set up a Wise account, which they could fund via their own USD account. Then, they could transfer money from their Wise account to the overseas freelancer's Wise account for minimal fees. Can't remember how much but I think it's around anywhere between $0.5 to $5. Basically, your client does a Wise-Wise transaction for the cheapest fees. Best if they are going to be paying overseas freelancers more regularly.
posted by moiraine at 5:47 AM on February 26
Alternatively, your client could set up a Wise account, which they could fund via their own USD account. Then, they could transfer money from their Wise account to the overseas freelancer's Wise account for minimal fees. Can't remember how much but I think it's around anywhere between $0.5 to $5. Basically, your client does a Wise-Wise transaction for the cheapest fees. Best if they are going to be paying overseas freelancers more regularly.
posted by moiraine at 5:47 AM on February 26
It took several weeks for Wise to supply my new USD account with a routing number.
I can access the routing and account numbers from the USD balance page, from the grey link that says "account number ending..." just under the USD Balance heading.
An ACH transfer can be initiated from the payer bank with the routing/account numbers exactly the same as a bank to bank process would work.
I second that a great thing to do would be to set up one's own Wise account. Transferring money via Wise from your own bank into your account and then sending it to another Wise user is very cheap and very fast, even if there is currency conversion. This would also get around the not-having-a-routing-number-yet thing if that's the receiver's circumstance.
I set up my account just to send money to one person in another country but have since really come to appreciate the multicurrency debit card.
posted by droomoord at 6:01 AM on February 26
I can access the routing and account numbers from the USD balance page, from the grey link that says "account number ending..." just under the USD Balance heading.
An ACH transfer can be initiated from the payer bank with the routing/account numbers exactly the same as a bank to bank process would work.
I second that a great thing to do would be to set up one's own Wise account. Transferring money via Wise from your own bank into your account and then sending it to another Wise user is very cheap and very fast, even if there is currency conversion. This would also get around the not-having-a-routing-number-yet thing if that's the receiver's circumstance.
I set up my account just to send money to one person in another country but have since really come to appreciate the multicurrency debit card.
posted by droomoord at 6:01 AM on February 26
One comment regarding Paypal, mentioned above. The fees might be low, but you need to look at the exchange rate provided. Wise is significantly cheaper than the competition.
See this chart for comparisons, but don't only trust this site; check for yourself.
posted by wile e at 6:07 AM on February 26
See this chart for comparisons, but don't only trust this site; check for yourself.
posted by wile e at 6:07 AM on February 26
I've re-read your question and it seems maybe less a question about how to use Wise and more how to explain to someone how to initiate an ACH bank-to-bank transfer from their bank, which is a process that will vary according to which bank they are using.
I haven't used any of the request or receive features within Wise, so I am not sure if that would help you help them pay you.
posted by droomoord at 6:32 AM on February 26 [1 favorite]
I haven't used any of the request or receive features within Wise, so I am not sure if that would help you help them pay you.
posted by droomoord at 6:32 AM on February 26 [1 favorite]
If I am an US based company with a business account using an application like quickbooks or similar software, paying via ACH is relatively straightforward and "easy." I get the ACH routing and account number, I type it in along with the amount, and poof, the payment goes through.
If I am a US based individual who does not have a business account, then paying via an ACH transfer is a nightmare and very difficult if not impossible. Banks generally do not permit individuals from initiating an ACH transfer from their account to another arbitrary account (with a few pre-validated exceptions). The claimed reason is to prevent accidents where somebody transposes two digits on an account number and gives a random person an extra deposit they were not expecting.
For one-off person to person or person to business payments we have Zelle, Venmo, paypal, etc. The individual sets up a Zelle / Venmo / account and links it to their banking account via ACH. From there they can transfer to other individuals or companies. The closest I can do and bypass the processing fees and 3rd party transfer agents is to write out an actual paper check and hand it to the individual and then have them deposit it into their account. I can also give the vendor my ACH information and then can withdraw a payment from my account. Or I can give my ACH info to my employer and they can deposit into my account. But in both of those cases the transfer is initiated by the business, not me as the consumer.
posted by SegFaultCoreDump at 1:17 PM on February 26
If I am a US based individual who does not have a business account, then paying via an ACH transfer is a nightmare and very difficult if not impossible. Banks generally do not permit individuals from initiating an ACH transfer from their account to another arbitrary account (with a few pre-validated exceptions). The claimed reason is to prevent accidents where somebody transposes two digits on an account number and gives a random person an extra deposit they were not expecting.
For one-off person to person or person to business payments we have Zelle, Venmo, paypal, etc. The individual sets up a Zelle / Venmo /
posted by SegFaultCoreDump at 1:17 PM on February 26
I don't live in the US, but I have used Wise to receive payments from a US client. I created a Wise account and got Wise to allocate me a US bank account. I shared these US bank account details (routing number, account number) with my client with each invoice. My US-based client paid these invoices, I received USD payments and then used the Wise app to convert the USD to my local currency and transfer into my own local bank account.
In your situation, you need to share the routing number, account number for the US bank account Wise created for you with your US based client -- sounds like you have done this! It is your client's responsibility to get their bank to transfer payment. If they're unsure how to do this through their bank's online banking site/app they need to talk to their bank -- call their bank's support line or go into a branch and get a teller to initiate the transfer for them. This isn't something you or Wise can do for them.
In my experience as someone using Wise to receive USD payments over a couple of years:
The good:
- Wise is not expensive, a small fee to create a wise account and then fees of roughly 0.5% to convert from USD into my local currency and a $0.50 transfer fee to transfer my local currency out of wise into my own bank account
- Wise's web app is fast, currency conversion from USD and transferring money out was essentially instant. This will depend on the details of which country you're in & how well the local bank transfer protocol works.
The less good:
- wise's customer support processes can be dysfunctional when faced with a situation that is slightly unusual. i have a wise business account but do not structure my business as a company. at some point, wise decided i needed to share some company-specific document to verify my business account, which was impossible, as there is no company. it took about 2 weeks and 20 emails with wise customer service to resolve this -- each interaction appeared to be handled by a different customer service agent who had no memory of previous interactions by their colleagues in working on the same issue.
- last year, wise informed me they'd changed the US bank they were working with to provide US accounts to their users, and consequently the routing number & account number I used to receive USD payments need to be changed. They gave less than one month's notice for this, which was a bit irritating (the old details were on invoices that had been sent but not paid yet). more lead time for these kinds of changes would have been appreciated.
- and, of course, sometimes the client was rather tardy in paying invoices -- not Wise's fault!
posted by are-coral-made at 2:48 PM on February 26
In your situation, you need to share the routing number, account number for the US bank account Wise created for you with your US based client -- sounds like you have done this! It is your client's responsibility to get their bank to transfer payment. If they're unsure how to do this through their bank's online banking site/app they need to talk to their bank -- call their bank's support line or go into a branch and get a teller to initiate the transfer for them. This isn't something you or Wise can do for them.
In my experience as someone using Wise to receive USD payments over a couple of years:
The good:
- Wise is not expensive, a small fee to create a wise account and then fees of roughly 0.5% to convert from USD into my local currency and a $0.50 transfer fee to transfer my local currency out of wise into my own bank account
- Wise's web app is fast, currency conversion from USD and transferring money out was essentially instant. This will depend on the details of which country you're in & how well the local bank transfer protocol works.
The less good:
- wise's customer support processes can be dysfunctional when faced with a situation that is slightly unusual. i have a wise business account but do not structure my business as a company. at some point, wise decided i needed to share some company-specific document to verify my business account, which was impossible, as there is no company. it took about 2 weeks and 20 emails with wise customer service to resolve this -- each interaction appeared to be handled by a different customer service agent who had no memory of previous interactions by their colleagues in working on the same issue.
- last year, wise informed me they'd changed the US bank they were working with to provide US accounts to their users, and consequently the routing number & account number I used to receive USD payments need to be changed. They gave less than one month's notice for this, which was a bit irritating (the old details were on invoices that had been sent but not paid yet). more lead time for these kinds of changes would have been appreciated.
- and, of course, sometimes the client was rather tardy in paying invoices -- not Wise's fault!
posted by are-coral-made at 2:48 PM on February 26
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Most online banking apps don't provide this information; tell your client to contact his bank and get this information.
I use Wise regularly, and it is the simplest, fastest, and cheapest method of transferring money that I have found. Some new apps might be a bit cheaper, but haven't been around as long as (Transfer)Wise. I would definitely not recommend PayPal.
posted by wile e at 3:04 AM on February 26 [3 favorites]