ACH payments and credit card payments are both forms of electronic payments. Because of this, reversing a payment is usually as straight forward as calling your bank. However, this does not seem to be the case with wire transfers.

At the end of the day, aren't they all just numbers in a database somewhere? Since they are all electronic in nature, should they not all share the same ease of reversal? What makes wire transfers different? Could someone explain this to me?

  • 1
    Note that there are several types of ACH payments, with one big difference between credits (A sends money to B) and debits (B requests money from A). Credits work like wire transfer, and I would expect them not to be reversible either. Debits work like a check or credit card transaction, and for obvious security reasons, that have to be reversible (though the conditions for that may vary, but at the very least for two reasons: not authorised, and no funds).
    – jcaron
    Dec 21, 2022 at 10:08
  • @jcaron ACH transactions are reversible regardless of point of origin.
    – littleadv
    Dec 21, 2022 at 19:10
  • 1
    For the non-US ones: ACH (Automated Clearing House) is a network used for electronically moving money between bank accounts across the United States (from (gocardless.com/guides/ach/what-is-an-ach-payment)
    – WoJ
    Dec 23, 2022 at 10:12
  • 1
    What makes you think wire transfers are irreversible? See the subsection entitled "Wait, are you telling me wires are reversible?" here: bitsaboutmoney.com/archive/no-payments-are-final (the rest of the article is interesting too).
    – blm
    Dec 27, 2022 at 20:30

5 Answers 5


The definition of transaction.

ACH are considered check payments, and are treated as such. Checks are validated and paid once presented, which may be days after being deposited. As such, these transactions are reversable for the cases where the checks (ACH charges) are rejected due to insufficient funds, lack of authority, fraud, etc.

Wire transfers are considered "confirmed funds" and are made available to the recipient immediately. As such, they are validated at initiation. The bank will confirm with the sender all the instructions, and will make sure that the funds are in fact available, before confirming the wire to the receiving bank. The receiving bank will make the funds available immediately as such the sender bank is on the hook for the funds.

If the sender later tries to reverse the wire, the receiver may have (and was entitled to) withdrawn the funds and the receiving bank no longer has the money to pay back the sending bank.

As such, wire transfers are non-reversable to support this transaction definition.

  • 8
    @AlanSTACK the merchant does not withdraw the funds (from your account). The CC company agrees to pay the merchant on your behalf, and you agree to settle up your debt with the CC company at the end of the billing cycle. None of your money has been spent/transferred yet, so there is nothing in your actual bank account to reverse. The merchants and CC companies have their own arrangements for payment
    – yoozer8
    Dec 21, 2022 at 4:39
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    The point is that it's not technically impossible, it's just the definition of the transaction.
    – littleadv
    Dec 21, 2022 at 4:51
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    This answer makes it sounds like non-reversibility is an inevitable property of wire transfers, but it's just due to the way the rules are set up in the US. (Which makes the answer a circular argument: We say they're not reversible because we say so.) It would be perfectly possible to make them reversible if the banks wanted to (that's how bank transfers work in the EU: if the transfer gets reversed after the recipient spent the money, the recipient's account might end up with a negative balance and the bank will make sure the recipient pays it all back real soon with a hefty fine on top).
    – TooTea
    Dec 21, 2022 at 12:56
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    @TooTea No, you're mixing up wires and "bank transfers". A completed wire transfer is not reversible in the EU. The rules are in fact global, under the SWIFT banking system. A electronic debit/credit transaction may be reversible in the EU as well in the US. This would be under the SEPA transfer system and the US equivalent, ACH. Knowing the difference between the two systems is critical to avoid fraud.
    – user71659
    Dec 21, 2022 at 18:42
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    In addition to because we say so, it's worth pointing out that if it did not say so, some other category of non-reversible money transfers would have to be created to fill that transactional gap. There is an absolute need for a way to transfer funds that is not cash and that requires court action (and not just "I'm sad so I whined to my bank") to reverse. Many chained transactions, including a majority of real estate settlements, require certainty that transfers can't be whimsically reversed by a customer service rep trying to appease an angry caller.
    – tbrookside
    Dec 22, 2022 at 12:32

There is no technical reason. The reason is that banks and bank customers want an instrument where a payment is irrevocable, as close to 100 percent as possible. If I get $1,000 through wire transfer then the money is mine, just as if the bank had sent me an envelope with ten $100 notes - it needs a court to say otherwise. Obviously when you pay by wire transfer you need to realise the money is gone. Your bank won’t protect you if it is fraud.

An example was given “what if your employer pays you too much money”. For normal transfers, they could talk to the bank and convince them to reverse the transfer. But not for a wire transfer, they have to take me to court if I refuse to pay.

On the other hand, if my company paid my salary with forged checks, or using someone’s hacked bank account, then the bank could take my money away. With a wire transfer, they can’t.

@AlanStack: If your bank claims you owe them $50,000, you have $50,000 in your bank account and fear they can access it, so you send $50,000 to my account by wire transfer: The bank could refuse to send the money. But if they send it, then there is no way to get the money back out of my account (except going to court).

  • What if it is fraud against the bank? For instance: the bank says that I owe them 50K. I have a 50K checking account with them. So I immediately transfer all 50K through a wire to a foreign bank account. Do they have the power to reverse that transaction, then? Or do they themselves have to get a court order with the foreign jurisdiction before doing anything?
    – AlanSTACK
    Dec 22, 2022 at 0:47
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    @AlanSTACK Too bad, you lost $50k. The Central Bank of Bangladesh lost $63 million that way.
    – user71659
    Dec 22, 2022 at 3:23
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    @AlanSTACK Oh, the ability for a bank to seize assets on deposit for a debt without a court order is a complex issue. If they had a court order, you could be found in contempt of court and jailed until you transferred the money back. H. Beatty Chadwick spent 14 years in jail for this.
    – user71659
    Dec 22, 2022 at 3:59
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    @WoJ A "wire transfer" is a very specific description of a particular way to move money. It is not a generic description of moving money around. Virtually no employer regularly sends money to employees using wire transfers. Most Dec 23, 2022 at 21:50
  • 3
    Not with a wire transfer. The company can’t go to the bank and get the money back. And I can refuse. Therefore - court. That’s exactly what a wire transfer is fore.
    – gnasher729
    Dec 24, 2022 at 18:33

Focusing solely on the consumer/payer side of this, the difference is that an ACH (or a cash payment, or a check) transaction is a buyer directly transferring money to a seller in exchange for a good or service (or more broadly, a person transferring money directly to another person for some reason, which may or may not be a purchase), whereas a credit card transaction is a buyer basically saying something like "Hi Visa, please pay for this burrito, and I promise to pay you for it at the end of the month/statement cycle".

The credit card scenario is interesting and more complex; it introduces a third party. The purchaser doesn't actually transfer any money for the transaction, and instead incurs debt to the card issuer. When a transaction is "reversed", money doesn't flow from the card company back to the buyer. The credit card company just agrees that "ok, you don't owe us money for this thing". (Exception in the case where this leads to a negative balance on the card). There is another piece to this though, which is the merchant/seller and card company relationship. These are typically governed by large, complex contracts. When a transaction is "reversed", money may or may not have already been transferred between the card company and the merchant, and may or may not need to be returned (or at least subtracted from future payments for other sales). There are certain screening and fraud prevention mechanisms in place to reduce the frequency of this happening, and merchants may have to pay penalties or even get their account cancelled (and no longer be able to accept credit card payments) if too many of their charges get reversed.

From a "numbers in a database" perspective, of course they're all reversible. You just need to add the corresponding opposite transaction to the database. But you'd need to get all parties involved to actually participate in a such a transaction (or grant permission for it to be executed, like in the case of a CC merchant contract).


To keep it very simple, it is regulated by the contracts between the different parties (and sometimes by law). One example

A credit card payment generally has five different parties (sometimes more, sometimes the same party has several roles):

  • The merchant selling
  • The merchants credit card payment processor
  • The international network (VISA or Mastercard are examples)
  • The buyers credit card issuer
  • The buyer

The contracts specifies how different situations should be handled. As example, you as a buyer has a limited time to "reverse" a payment (typically 90 days from purchase date). All parties in the chain will be affected by this. Most often your request will be handled as an investigation. It could potentially lead to the merchant beeing excluded from receiving further credit card payments.

In a similar way other payments are controlled by contracts between the parties. As for wire transfers the contracts stipulate that once initiated they are non-reversible.


There isn't a single database. Each bank has its own database. Once your bank has transferred the money to the other bank, the other bank now has the money, recorded in its database.

The whole process is governed by:

  • The laws in your country
  • The rules of the banking regulator in your country
  • The contracts between all the parties in a funds transfer

If you try to reverse a transfer to another bank, they have no obligation to send the money back unless one of the three items above applies.

  • There is a single database: it's at the central bank (e.g. US Federal Reserve, European Central Bank, Bank of England). Any transfer of money, not involving physical currency and outside a single bank, ends up as a transfer on the books of the central bank. A wire is an instruction to the central bank to make such a transfer.
    – user71659
    Dec 23, 2022 at 4:39
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    @user71659 are you sure about this? It is not at all a given. The Federal reserve banks work in this way, but that doesn't necessarily mean that that is the role of the central bank by definition (in fact - it is not). Most banks have correspondent accounts with other banks and settle in batch daily between these accounts, or utilize an intermediary (especially for smaller banks, or banks in different regions).
    – littleadv
    Dec 26, 2022 at 8:11
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    @user71659 why are you so sure? Bookkeeping for other banks is not the function of a central bank at all. In fact, no central bank does that.
    – littleadv
    Dec 27, 2022 at 1:21
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    @user71659 do you have any references to back this up? Or is it what you think should be?
    – littleadv
    Dec 27, 2022 at 1:29
  • 1
    @user71659 you're confusing bookkeeping with controls and auditing.
    – littleadv
    Dec 27, 2022 at 1:59

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