ACH Payment Processing-All You Need to Know

 When it comes to ACH payment processing, there are a few things you need to know. ACH is an acronym for Automated Clearing House. This is an electronic network used by financial institutions to process transactions. 


ACH payments are typically used for direct deposit of payroll, social security benefits, and tax refunds. They can also be used for making one-time payments, such as utility bills or credit card payments.


The ACH network is overseen by the National Automated Clearing House Association (NACHA). NACHA sets the rules that financial institutions must follow when processing ACH transactions.


There are two types of ACH payments: batches and individual payments.


Batch payments are typically used for payroll direct deposit. With batch payments, the payer (employer) sends one large file of payment information to their bank. The bank then processes all of the payments in that file at once.


Individual payments are typically used for things like utility bills and credit card payments. With individual payments, the payer sends each payment as a separate transaction.


When an ACH payment is processed, the funds are first transferred from the payer’s account to a intermediary bank. The intermediary bank then transfers the funds to the payee’s bank. The payee’s bank then credits the payee’s account with the funds.


The whole process usually takes one to two business days.


There are a few things you need to know about ACH payment processing fees. First, most banks charge a flat fee per transaction. This fee is typically around $0.50-$1.00. Second, some banks also charge a percentage of the transaction amount. This fee is typically around 1%.


ACH payment processing can be a great way to save time and money. It’s important to understand the fees involved before you decide to use ACH payments.


If you have any questions about ACH payment processing, feel free to contact us. We’d be happy to help!

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