Ask a finance team which payment rail feels riskier and most will say wire. Wires are irrevocable, they move quickly, and the amounts are usually large. ACH feels safer, smaller, reversible, and used for routine payments.
The AFP annual Payments Fraud & Control Survey has, for several years running, found that ACH is now the most frequently targeted rail. The reasons are structural.
Why ACH is a bigger target than it looks
- ACH details are stored in more systems, exposed to more employees, and shared through more channels than wire instructions.
- The reversibility of ACH creates a false sense of safety, companies often skip verification on ACH that they would perform for a wire.
- ACH batch processing means fraudulent entries can be buried in a file of hundreds of legitimate transactions.
- The 60-day dispute window for corporate ACH is far shorter than most companies realize.
The rail is not the problem
The rail is not what needs fixing, the exchange of account details before the first payment is. Both wire and ACH depend on the sender knowing the correct routing and account number for the recipient. If that exchange happens over email, both rails are equally exposed. If that exchange is verified, both rails are equally safe.
Sources
- AFP Payments Fraud & Control Survey
- Nacha Operating Rules
