What is ACH? Quick Facts About The Automated Clearing House & The ACH Network
ACH (Automated Clearing House) is a system used to transfer funds electronically between the accounts of businesses and individuals. ACH automates common transactions such as depositing payroll checks, paying bills, making purchases, and transferring funds. It replaces the slower and more cumbersome paper-based system of checks, drafts, deposit and withdrawal slips, and other forms of money transfers.
ACH offers an efficient, low-cost, and safe means of conducting financial transactions. Because all transactions are initiated and processed electronically, ACH is significantly less expensive and more efficient than paper-based systems while also being less expensive than wire transfers.
Did You Know?
- ACH cuts your delivery costs by eliminating postage and paper draft expenses.
- ACH eliminates the costs and inefficiencies of paper check processing, including the costs of stop payments, inconvenience of lost checks, and need for replacement checks.
- ACH keeps you and your customers better informed by providing transaction descriptions and audit trails not available through paper transactions.
- ACH reduces the direct and indirect costs to you and your customers of late payments. ACH also helps eliminate late fees for payments you make.
- ACH improves cash flow on payments you receive and allows you to accurately plan your financial schedules.
- ACH reduces the risk of fraud for transactions.
The Standard ACH Applications
- Direct Deposit allows companies to deposit funds into a person’s checking or savings account. It is most commonly used for Direct Deposit of Payroll, which automatically deposits payroll “checks” into employees’ accounts.
- Direct Payment allows companies to originate debit transactions against individuals’ checking and savings accounts. It is useful if your company collects billings using regular payment schedules.
- ACH Cash Concentration enables a company to transfer funds from the depository bank accounts of its local branches or affiliates into a main office “concentration account.” The transfers are originated as ACH debit transactions.
- Electronic Check Conversion Services convert individual checks into ACH transactions.
- Telephone-Initiated Payments let consumers verbally authorize ACH debits to their accounts.
- Internet-Initiated Payments allow consumers to authorize payments over the internet.
- EDI/ACH Corporate Payments let companies pay one another electronically through ACH, at the same time exchanging such information as invoice data and account numbers
- Tax Payments allow companies to initiate payment of federal and state taxes.
The Priority Solution
ACH.COM is the ACH operating division of Priority Holdings LLC, one of the only processors in the U.S. with a comprehensive suite of payment solutions including ACH, remote deposit capture and credit card processing all under one roof.
Want more information? Contact us at (844) ACH-PAYS or firstname.lastname@example.org.