ACH Payments

What is an ACH payment?

Consumer Use: Individuals benefit from ACH when they use services like online bill payment or receive direct deposits (such as paychecks) into their checking accounts.

Business Transactions: Businesses can also leverage the ACH network to:

• Receive payments from customers.
• Send payments to vendors.
• Transfer money between accounts at different banks.

Processing Times: The ACH network is available to process payments for approximately 23 hours every business day and payments will settle on average four times. An ACH payment can be credited the same day, the next day, or within two days for speedy processing.

Categories of Transactions:

• Direct Payment: Make or receive payments to businesses or consumers. Examples include paying credit card bills, donating to campaigns, or using mobile payment services.
• Direct Deposit: Make payments from businesses or government agencies to consumers. Employers use direct deposit, which is also used to disburse Social Security benefits and federal tax refunds.

Processing Entities: Each ACH payment is routed and processed by the U.S. Federal Reserve or the Clearing House Payments Company known as a private business owned by 24 major commercial banks. The Clearing House’s ACH payments service referred to as the Electronic Payments Network, handles approximately half of all U.S. commercial ACH.

What are ACH Payments?

ACH is a payment system organized and administered by Nacha (formerly the National Automated Clearing House Association). It was founded in 1974 to enhance the U.S. payments system.

In summary, ACH payments enable seamless electronic transfers of money between bank accounts, benefiting both individuals and businesses.

What does ACH stand for?

ACH is the abbreviation for the Automated Clearing House network.

Also referred to as:

• electronic bank transfers
• direct bank transfers