ACH Network
What is an ACH Network?
The ACH Network is a financial transaction processing system in the United States that enables the electronic movement of funds between bank accounts. This secure and reliable network is used by individuals, businesses, and government agencies to conduct various types of payments, including direct deposits, bill payments, and tax refunds. The ACH Network serves as a cornerstone of the U.S. financial system, streamlining the transfer of funds and supporting billions of transactions each year.
How the ACH Network Works
The ACH Network functions by batching and processing transactions in bulk, typically taking one to two business days to complete a transfer. This method differs from real-time payment systems, as ACH transactions are processed in scheduled batches throughout the day. When a transaction is initiated, it is transmitted through the network, sorted by participating financial institutions, and ultimately credited or debited to the appropriate accounts.
Types of ACH Transactions
ACH transactions are generally categorized into two main types:
- ACH Credits: Used for transactions like payroll direct deposits, government benefits, and refunds. These transfers push funds into the recipient’s account.
- ACH Debits: Used for payments such as monthly subscriptions, mortgage payments, or bill payments, where funds are pulled from a customer’s account.
Benefits of Using the ACH Network
The ACH Network offers several advantages, including lower transaction costs compared to credit card processing, enhanced security features, and the ability to support recurring payments. Its efficiency and reliability make it a preferred method for large-volume payment processing across multiple
Learn more about ACH payments and how the ACH Network can benefit your business by providing a safe, efficient, and cost-effective solution for managing electronic payments.
For more information or to explore implementing ACH solutions, contact our team at PrismPay today!
Also referred to as Automated Clearing House Network.