![]() It stands for Automated Clearing House and is used for various types of payments, such as direct deposit, payroll, and payment processing. The ACH Network is a financial institution that facilitates the electronic transfer of funds between consumers, companies, and other financial institutions. Your bank account will then electronically pull the agreed-upon payment from the customer’s account. ![]() To initiate an ACH payment, customers must provide authorization through a signature on an ACH authorization form or by agreeing verbally on a recorded call. So, what’s the difference between ACH transfers and ACH payments? ACH payments refer specifically to electronic payments made to pay a bill or invoice, while ACH transfers are broader, referring to any movement of funds between two bank accounts. It is most commonly used for direct deposits (like an employer distributing payroll) and customer collections. What Is an ACH Payment?Īn ACH payment (Automated Clearing House) is an electronic payment made through an Automated Clearing House Network. While ACH payment processing may seem daunting to you, they’re fast becoming the preferred payment option.įor this reason, this guide answers pertinent questions like “ What does ACH stand for?” and explains the fundamentals of ACH transfers and payments, providing you with the necessary knowledge and confidence to implement this efficient payment method in your business. They’re quick, convenient, and cost-effective.Īccording to NACHA, ACH payments experienced a 13.7% increase, reaching $612.6 billion in 2023. What Is an ACH Transfer: Understanding the Basics of this Payment MethodĪCH payments allow customers and businesses to transfer money between banks without relying on paper checks, wire transfers, credit card networks, or cash.
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