What are ACH Payments?

An ACH payment is an electronic funds transfer made through the Automated Clearing House (ACH) network. This network is used in the United States to process a variety of financial transactions, including direct deposits, bill payments, and money transfers between bank accounts.

Key points about ACH payments:

Types of ACH Payments: There are two main types—ACH credit and ACH debit.

• ACH Credit: The payer initiates the payment, such as direct deposit for payroll.
• ACH Debit: The payee initiates the payment, like when a company withdraws funds from your account to pay a bill.

Processing Time: ACH payments typically take 1-3 business days to process, though same-day ACH options are becoming more common.

Cost: ACH payments are generally low-cost or free, making them a preferred method for recurring payments.

Security: ACH payments are secure and regulated by the National Automated Clearing House Association (NACHA), ensuring compliance with federal regulations.

ACH payments are widely used for transactions like paying bills online, receiving government benefits, or transferring money between accounts.