International Credits and Debits

International Credits and Debits

A credit is when the bank is disbursing funds.  It is easy for banks to do an international direct deposit account for credits.  The bank knows the credit history of the customer.  It has the data to decide if the account should be credited immediately.  Or, the bank may decide to allow the customer limited use of the funds.  Or wait to disburse until after the FX settles.

A debit is when the bank collects funds.  Processing debits is more challenging than processing credits.  Debit transactions require that the bank determine the credit worthiness of both its own customer and the person on the other end of the transaction.  The bank has several choices

  • Make all the funds available 2 days after the collection request. This often is standard operating procedure for transfers within a single country.
  • If bank’s customer has enough money in his account or an adequate line of credit to cover any losses, a bank may decide to make funds available on international transactions as well.
  • The bank can set a certain number of days.  The number is based on the clearing and float period in the other country.
  • The bank may make only a percentage of funds available after a preset number of days.  Then, the bank can slowly release funds until 100% have been credited.  This can be very profitable for the bank as it takes advantage of float.

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Direct Deposit Calculator

The Electronic Payments Association has an online calculator as a tool for companies to understand how much they can save annually by converting payroll to Direct Deposit rather than paying by check. The calculator was developed by NACHA’s Marketing Management Group (MMG) in consultation with Treasury Alliance.

The calculator can be found on the business section of

Direct Deposit remains the most widely used type of ACH payment accounting for over 5 billion payments in the United States. Direct Deposit is used for payroll, expense and travel reimbursement, pension and annuity payments, interest payments, retirement and mutual fund distributions, Social Security, Veterans and other government benefits, and tax refunds.

The calculator uses a company’s input and industry averages to determine a “typical” or “average” cost of implementing or increasing Direct Deposit at the company. Companies input the following numbers into the calculator:

Total number of employees.

Percentage of salaried employees.

Current percentage of salaried on Direct Deposit.

Target percentage of salaried on Direct Deposit.

Current percentage of hourly on Direct Deposit.

Target percentage of hourly on Direct Deposit.

For more info on ACH payment processing, visit

Go Green with Direct Deposit

PayItGreen was formed by NACHA as an education resource. The mission of the organization is to show the environmental benefits of paying bills and issuing payroll electronically rather than with paper.

One of the most helpful parts of the site is calculators where businesses and consumers can track savings on carbon footprints by comparing paper to electronic transactions. It is a fun way to quickly see how much impact even the smallest changes can make in keeping our environment safe.

The site says that 22 million Americans still do not use direct deposit. If these employees chose to receive wages electronically, 8.7 million pounds of paper would be saved. And, 25 million pounds of greenhouse gases would not be released.

Large companies have offered direct deposit for years. Small and medium companies are now jumping on the band wagon too.

Consider a company that employs 300 people, with payroll twice per month. Paying all employees electronically rather than issuing checks and payroll stubs saves 121 pounds of paper and avoids the release of 346 pounds of greenhouse gases into the atmosphere in one year.

For businesses, the case for ACH payments electronic transactions is a positive financial equation. According to a study by PayitGreen, businesses saved $6.7 billion over the last ten years by switching employees to direct deposit.. This is an average annual savings for each employee of $176.55.

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