ACH payment processing made easy

Understanding ACH payment processing

Benefiting both merchants and customers, these electronic payments go through the Automated Clearing House Network. Money is moved from one institution account to another with the help of a centralized system that directs ACH funds to their final destination.

Why everyone likes ACH payments

Allow your customers to set it and forget it with a fast and reliable alternative to paper checks and credit card payments.

Reduce the worrying about sending funds on time. Streamline and automate your accounting with a convenient payment method, resulting in savings that can be significant.

Cut costs

Increase cash flow with automation that can lead to big savings — especially when collecting recurring payments. Save with the most cost-effective method for the electronic transfer of funds.

Get paid faster

Eliminate paper invoices, paper checks and delays due to bounced payments and time-consuming trips to the bank.

Reduce retention

Leveraging ACH payment processing can help merchants see less chum and fewer declines, since checking accounts don’t have expiration dates like credit and debit cards.

Fewer interruptions

Help with recurring billing, so busy customers don’t have to constantly keep an eye out for incoming bills or take action when payments are due. Everything runs on autopilot.

How ACH payment processing works

Often called direct pay or electronic checks, ACH payments help remove the barriers for businesses to process funds and get paid faster.

1. A customer receives a bill
2. Customer initiates payment by providing authorization and necessary financial institution information to the merchant
3. ODFI (Originating Depository Financial Institution) debits the customer’s account and sends the ACH file to the Federal Reserve System
4. The Federal Reserve routes the ACH file to the receiving bank or depository financial institution (RDFI)
5. RDFI processes payment
6. Payment clears and the merchant has access to the funds

Spotting the difference between ACH system and credit cards

Differentiating between the types of payments is critical, for example, unlike credit card payments, ACH payment processing is a U.S.-payments network only and applies solely to banking. ACH payments cannot be processed from debit or credit cards.

There are two main categories:

Direct deposits

Includes all deposit payments — payroll, employee expense reimbursement, interest payments, utility bills, government benefits, taxes and other refunds.

Direct payments

Covers the use of funds for making payments, either by individuals or organizations.

Selecting the right payment solution and automation features that your business needs makes all the difference when planning for the future. Unifying your operations, from payments type to reporting, helps businesses stay agile as markets change and tech advances. Combining ACH payment processing into the payment types you’re already using is only one of the many ways businesses can improve their overall workflows and gain time back.