{"id":2644,"date":"2026-10-22T15:00:00","date_gmt":"2026-10-22T09:30:00","guid":{"rendered":"https:\/\/blog.remitcircle.com\/?p=2644"},"modified":"2026-10-22T13:47:19","modified_gmt":"2026-10-22T08:17:19","slug":"how-to-pay-an-indian-vendor-from-the-us-ach-vs-fedwire-vs-swift","status":"publish","type":"post","link":"https:\/\/blog.remitcircle.com\/education\/how-to-pay-an-indian-vendor-from-the-us-ach-vs-fedwire-vs-swift\/","title":{"rendered":"How to Pay an Indian Vendor From the US: ACH vs Fedwire vs SWIFT"},"content":{"rendered":"\t\t
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The short answer<\/b><\/h2>\n

ACH and Fedwire are US-domestic rails. On their own, they can’t deliver money into an Indian bank account.<\/b> To reach a bank in India directly, you send an international (SWIFT) wire, which works but often costs the most and arrives short. The alternative is to pay your vendor’s <\/span>USD virtual account<\/b> on a cross-border collections platform: you pay it by ACH or Fedwire like any US vendor, and the platform settles rupees into the vendor’s Indian bank account with the export paperwork they need.<\/span><\/p>\n

Here’s the full breakdown.<\/span><\/p>\n\n\n\n
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Key takeaways<\/b><\/p>\n

\u2022<\/span> ACH:<\/b> cheap and familiar, but built for US bank accounts. Not a routine way to reach an Indian account.<\/span><\/p>\n

\u2022<\/span>Fedwire:<\/b> fast, same-day US wire. Also domestic only.<\/span><\/p>\n

\u2022<\/span>SWIFT wire:<\/b> reaches the vendor’s Indian bank directly, but fees are split along a chain of banks and the vendor often receives less than the invoice.<\/span><\/p>\n

\u2022<\/span>USD virtual account:<\/b> you pay a US account by ACH or Fedwire; the vendor gets rupees in India plus a FIRA (proof of foreign inward remittance).<\/span><\/p>\n

\u2022<\/span>Paperwork on your side:<\/b> collect a W-8BEN (individual) or W-8BEN-E (company) before the first payment. A Form 1099 is generally not required for work done entirely outside the US.<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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First, the three US rails in plain terms<\/b><\/h2>\n

ACH (Automated Clearing House)<\/b><\/h3>\n

ACH is the batch network behind payroll, vendor payments and direct debits in the US. It’s low-cost (often free or a few dollars per payment on business accounts) and usually settles in one to two business days, with same-day options at many banks.<\/span><\/p>\n

The catch: it’s designed to move money between US bank accounts using a routing number and an account number. There is an international ACH format, but it only works where a gateway connects the US network to the destination country’s payment system, and it isn’t something most US business banking offers as a routine way to pay an Indian account. In practice, an AP team can’t just enter an Indian account into an ACH payment.<\/span><\/p>\n

Fedwire<\/b><\/h3>\n

Fedwire is the Federal Reserve’s real-time gross settlement system: what your bank uses for a “domestic wire.” Payments are individual, final, and typically arrive the same business day, often within hours. It costs more than ACH (a domestic wire fee on the sender side, and sometimes an incoming fee on the receiver side).<\/span><\/p>\n

Like ACH, Fedwire moves dollars between US banks. It doesn’t deliver into an Indian bank account by itself.<\/span><\/p>\n

 <\/span><\/p>\n

SWIFT (international wire)<\/b><\/h3>\n

SWIFT is the messaging network banks use to send cross-border wires. When you choose “international wire” in your bank portal, you’re sending a SWIFT payment. It can reach the vendor’s Indian bank (an authorised dealer, or AD, bank, meaning one permitted by India’s central bank to handle foreign exchange) directly.<\/span><\/p>\n

The money doesn’t always travel straight there. If your bank and the vendor’s bank don’t have a direct relationship, the payment passes through one or more <\/span>correspondent (intermediary) banks<\/b>, and each can take a fee along the way.<\/span><\/p>\n

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ACH vs Fedwire vs SWIFT vs a USD virtual account: side by side<\/b><\/h2>\n\n\n\n\n\n\n\n\n\n
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 <\/span><\/p>\n<\/td>\n

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ACH<\/b><\/p>\n<\/td>\n

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Fedwire<\/b><\/p>\n<\/td>\n

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SWIFT wire<\/b><\/p>\n<\/td>\n

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USD virtual account<\/b><\/p>\n<\/td>\n<\/tr>\n

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Reaches an Indian bank?<\/b><\/p>\n<\/td>\n

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No (US accounts only)<\/span><\/p>\n<\/td>\n

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No (US accounts only)<\/span><\/p>\n<\/td>\n

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Yes, directly<\/span><\/p>\n<\/td>\n

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Yes, via the platform’s payout to India<\/span><\/p>\n<\/td>\n<\/tr>\n

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What you enter<\/b><\/p>\n<\/td>\n

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US routing + account no.<\/span><\/p>\n<\/td>\n

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US routing + account no.<\/span><\/p>\n<\/td>\n

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Beneficiary name, address, account no., bank SWIFT\/BIC<\/span><\/p>\n<\/td>\n

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US routing + account no. (provided by the vendor)<\/span><\/p>\n<\/td>\n<\/tr>\n

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Typical payer cost<\/b><\/p>\n<\/td>\n

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Low, often $0 to a few dollars<\/span><\/p>\n<\/td>\n

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Domestic wire fee<\/span><\/p>\n<\/td>\n

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Outgoing international wire fee, higher if you choose to cover all charges<\/span><\/p>\n<\/td>\n

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Same as a domestic ACH or Fedwire<\/span><\/p>\n<\/td>\n<\/tr>\n

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Typical vendor cost<\/b><\/p>\n<\/td>\n

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n\/a (can’t reach India)<\/span><\/p>\n<\/td>\n

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n\/a (can’t reach India)<\/span><\/p>\n<\/td>\n

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Intermediary deductions, Indian bank charges, bank FX conversion<\/span><\/p>\n<\/td>\n

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The platform’s disclosed fee and FX rate<\/span><\/p>\n<\/td>\n<\/tr>\n

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Speed<\/b><\/p>\n<\/td>\n

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1\u20132 business days (same-day available)<\/span><\/p>\n<\/td>\n

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Same day<\/span><\/p>\n<\/td>\n

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Commonly 1\u20135 business days<\/span><\/p>\n<\/td>\n

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ACH\/Fedwire time to the US account, plus the platform’s payout time<\/span><\/p>\n<\/td>\n<\/tr>\n

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Arrives in full?<\/b><\/p>\n<\/td>\n

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n\/a (can’t reach India)<\/span><\/p>\n<\/td>\n

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n\/a (can’t reach India)<\/span><\/p>\n<\/td>\n

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Often short, under shared charges<\/span><\/p>\n<\/td>\n

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Full USD amount lands in the vendor’s account; fees are shown upfront<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Fees and timelines vary by bank and platform. Treat the cost lines as typical patterns, and check your own bank’s fee schedule before you rely on a number.<\/span><\/i><\/p>\n

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Who actually pays: payer-side vs vendor-side costs<\/b><\/h2>\n

This is the part that causes most of the friction between US AP teams and Indian vendors, so it’s worth getting exact.<\/span><\/p>\n

 <\/span><\/p>\n

On a SWIFT wire, you choose a charge option<\/b><\/h3>\n