ACH Payments - How ACH Payments Work

How ACH Payments Work

ACH payments are electronic payments made through the Automated Clearing House (ACH) Network. Using ACH payments can help reduce errors, speed things up, and save resources. Let’s cover the basics of ACH payments for businesses and consumers

Basics of ACH Payments

ACH payments are simply electronic transfers from one account to another. Common uses of ACH payments are:

• Customer pays service provider
• Employer deposits money to employee account
• Consumer moves funds from one bank to another
• Business pays supplier for products

Because they’re electronic, ACH payments use fewer resources (paper, ink, fuel to transport checks, etc). In addition, ACH payments make it easier to keep track of finances. Instead of generic check information on a bank statement, you see the other party’s name if you’ve used an ACH payment. Then it’s easier to categorize the transaction with your financial software.

ACH payments can be electronic from start-to-finish, or they can happen when a paper check is converted and processed electronically.

• Overview of Electronic Checks

Why Businesses Like ACH Payments

Businesses benefit from ACH payments. There’s no need to wait for customers to write checks and have them lost in the mail. ACH payments are received more quickly and reliably, and there’s no need to forward checks to the bank and wait for processing.

• ACH Processing Basics

Why Consumers Like ACH Payments

Consumers also benefit from ACH payments. There’s no need to write checks and get them into the mail on time. If using automatic ACH payments, they do not need to keep an eye out for bills - everything runs on autopilot for better or worse.

• ACH Debit for Consumers