ACH

The ACH Network is at the center of commerce in the U.S., moving money and information from one bank account to another through Direct Deposit and Direct Payment via ACH transactions, including ACH credit and debit transactions; recurring and one-time payments; government, consumer and business-to-business transactions; international payments; and payments plus payment-related information. Each year it moves more than $40 trillion and nearly 23 billion electronic financial transactions, and currently supports more than 90 percent of the total value of all electronic payments in the U.S. As such, the ACH Network is now one of the largest, safest and most reliable payment systems in the world, creating value and enabling innovation for all participants.

• The ACH Network is a batch processing system in which financial institutions accumulate ACH transactions throughout the day for later batch processing.
• Instead of using paper to carry necessary transaction information, such as with checks, ACH Network transactions are transmitted electronically, allowing for faster processing times and cost savings.
• The ACH Network processes two types of transactions: Direct Deposits via ACH and Direct Payments via ACH.
• Direct Deposit via ACH is the deposit of funds for payroll, employee expense reimbursement, government benefits, tax and other refunds, and annuities and interest payments. It includes any ACH credit payment from a business or government to a consumer.
• Direct Payment via ACH is the use of funds to make a payment. Individuals or organizations can make a Direct Payment via ACH as either an ACH credit or ACH debit.
  • A Direct Payment processed as an ACH credit pushes funds into an account. An example of this is when a consumer initiates a payment through his/her bank or credit union to pay a bill.
  • A Direct Payment processed as an ACH debit pulls funds from an account. An example of this is when a consumer establishes a recurring monthly payment for a mortgage or utility bill, and his/her account is debited automatically.
• ACH credit and ACH debit transactions process quickly. Settlement, or the transfer of funds from one financial institution to another to complete the transaction, generally happens next day.
• Specifically, the NACHA Operating Rules require that ACH credits settle in one to two business days and ACH debits settle on the next business day. Recent enhancements to the NACHA Operating Rules will now enable same day settlement of virtually all ACH transactions.