About ACH

Automated Clearing House (ACH) payments are a cost effective, electronic option with its own “payment rails,” separate from commercial cards. As noted below, there are ACH credit and debit transactions. For more information, visit the Nacha website.

ACH Credits

An ACH credit transaction involves an originator (the payor) authorizing a financial institution to send money from its account to recipients' accounts (payees). The funds are typically available within a day or two after the transaction is made. This type of transaction is sometimes referred to as direct payment.

A Same Day ACH credit transaction involves an originator (the payor) authorizing a financial institution to send money from its account to recipients' accounts (payees). The funds are available at close of business on the day the transaction is made (subject to certain timing parameters). As of March 2022, the limit on Same Day ACH payments is $1,000,000.

ACH Debits

An ACH debit transaction involves the recipient instructing its financial institution to withdraw money from the payor's account. For example, a merchant might pull money directly from a customer’s account (after the customer provides their banking information for this purpose). The funds are typically available within a day or two after the transaction is made.

A Same Day ACH debit transaction involves the recipient instructing its financial institution to withdraw money from the payor's account. Taxes are sometimes paid this way. The funds are available at close of business on the day the transaction is made (subject to certain timing parameters).

Related Resources

• Payment strategy

Don't forget to subscribe to the blog (no charge) to receive educational content!