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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International ACH

An international payment via ACH refers to a credit or debit entry that with a financial entity located outside of the jurisdiction of the US.

Typical uses for international ACH are:

  1. Payroll.  For example, a US or multinational company has employees working and living offshore.  The US companies sends an ACH file to the domestic bank with which it does business.   The file is transmitted to the international branch of the US bank which then credits the employee’s accounts with their payroll, via international direct deposit.
  2. Vendor Payments.   A U.S.-domiciled company is a subsidiary of an offshore multinational corporation The parent company has centralized many of the global treasury, functions of its global subsidiaries in a location outside of the US.  Vendors are paid from the international company headquarters.
  3. International Remittance.  For example, sending money to family members located outside of the US.
  4. Pensions. A US company makes payments to retirees living outside of the US.


For more information on international ACH, contact