Must Read: Payment Processing for Nonprofits: The Essential Guide How Do ACH Payments Work? When you also pay your electricity bill online straight from your bank account, that is an ACH payment. When you set up direct deposit with your employer, the money that appears in your bank account each pay period is an ACH payment. In practice, ACH payments are an integral part of our daily lives, though we often don’t realize it. Money is like cars on this highway, moving from one location (or bank) to another.Īn ACH payment is essentially one of these cars- it represents money in transit, moving across the ACH ‘highway’ to its intended destination. Think of the ACH network as a vast, nationwide highway system. To help you better understand ACH payments, let’s break it down into simpler terms. Still, they all share one thing: using the ACH network to move funds electronically from one bank account to another. The term “ACH payment” encompasses several different types of transactions. This method is used millions of times daily around the country to pay bills, move money between personal accounts, and make payroll deposits. It’s a system that ensures your bills get paid on time, your paycheck lands in your bank account, and your tax refunds come through as expected.Īn ACH payment is a type of electronic funds transfer (EFT) that moves money between banks through the Automated Clearing House network. In the simplest terms, the Automated Clearing House (ACH) is the digital highway that enables money to move smoothly and swiftly from one bank to another across the nation. That’s a testament to the ACH network’s integral role in the American financial ecosystem. Recent data shows that in 2022 alone, the ACH network processed a staggering 28.8 billion electronic payments.
0 Comments
Leave a Reply. |