What is ACH processing?
Automated Clearing House (ACH) processing is an electronic payment system that allows individuals and businesses to transfer funds between bank accounts. It is a secure, reliable, and cost-effective way to move money. ACH transactions are processed in batches and can be used for a variety of payment types, including direct deposit, payroll, vendor payments, and consumer bill payments.
How does ACH processing work?
ACH processing works by electronically transferring funds between bank accounts. The process begins when the sender initiates a transaction through their bank or payment processor. The transaction is then sent to the ACH network, which verifies the sender's account information and the availability of funds. If the transaction is approved, the funds are transferred to the receiver's bank account. The entire process typically takes 1-2 business days to complete.
What are the benefits of using ACH processing?
There are several benefits to using ACH processing, including:
- Lower transaction fees compared to other payment methods
- Increased security and reduced risk of fraud compared to paper checks
- Faster processing times compared to paper checks
- Greater convenience for both senders and receivers
- Ability to automate recurring payments
What types of transactions can be processed through ACH?
ACH processing can be used for a variety of payment types, including:
- Direct deposit of payroll and government benefits
- Vendor payments
- Consumer bill payments
- Business-to-business payments
- Person-to-person payments
- Recurring payments, such as subscriptions and membership fees
Nick Simpson
Founder @ WorkMade
I started working for myself at 9. My first tax bill showed up at 14. I didn’t understand it, and nobody around me could really explain it. If you’ve been there, you get it. Twenty years later, after creative directing for brands in New York and buying and selling a few companies, I kept seeing the same thing: smart, talented people losing money to a system that wasn’t built for how they work. That’s why I built WorkMade. Not to make taxes “easier to understand” but to make them disappear into the background, so you can get on with your life.