An ACH payment is an electronic fund transfer made between banks and credit unions across the Automated Clearing House (ACH) network. The ACH system is a way to transfer money between bank accounts, rather than going through card networks or using wire transfers, paper checks, or cash. ACH payments are used for all kinds of fund transfer transactions, including direct deposit of paychecks and monthly debits for routine payments. Merchants often enable consumers to pay bills via ACH by providing an account number and bank routing number. ACH payments contrast with real-time gross settlement (RTGS) payments which are processed immediately by the central RTGS system and not subject to any waiting period on a one-to-one basis.

ACH payments are initiated by the payer and include payments such as direct deposits, payrolls, retail payments, and vendor payments. ACH direct debit collections are initiated by the payee with pre-authorization from the payer, and include consumer payments such as utility bills, insurance premiums, mortgage loans, and other types of bills. ACH transactions can take several days to complete, as they are processed in batches and subject to precautions against fraud and money laundering.

ACH payments are processed through the Automated Clearing House (ACH) network, which is a computer-based electronic network for processing transactions between participating financial institutions. The ACH network is organized and administered by Nacha, formerly the National Automated Clearing House Association, which was founded in 1974 to improve the U.S. payments system. The ACH network processes two kinds of ACH transactions: direct deposits and direct payments. Direct deposits are used for payments from businesses or the government to a consumer, particularly for payroll, as well as government benefits, tax refunds, interest payments, and more. Direct payments refer to the movement of money to make or receive payments, such as paying a credit card bill, donating to someones GoFundMe campaign, or sending money to a friend via your banks mobile payment service.

In summary, ACH payments are electronic fund transfers made between banks and credit unions across the Automated Cl...