If you are looking for a more secure way to transfer money, then ACH payments may be the smartest choice for your business. Before learning about the ACH payment process, it’s important first to know what “ACH” means and what it does.

What is an ACH Payment?

The Automated Clearing House network (ACH) is one of the largest payment systems in the United States, processing large amounts of both credit and debit transactions. ACH payment processing refers to any money transfer between banks that goes through the Automated Cleaning House network. Money is sent directly from the payee’s bank account, which often results in lower fees and faster transfer.

ACH Payment Transaction Types

The two main types of transactions the ACH Network processes are Direct Deposits, generally used for payroll purposes, and Direct Payment, used to transfer money to make a payment. Within these transactions, there are different methods of payment: ACH Credit and ACH Debit.

Both ACH Credit and Debit require the payee to authorize transactions to move or send money between accounts. ACH Debit transactions take money from a bank account to pay a debt, such as with automatic bill payment or reoccurring payments. ACH Credit transactions send money from one account to another, allowing you to process money transfers between multiple bank accounts. ACH payment processing allows you to automate your payments and quickly transfer money from one account to another.

Are ACH Payments Secure?

When it comes to transferring money, it’s important to know that your methods for payment are safe and secure. This is where ACH payments have a distinct advantage: according to NACHA, the Electronic Payments Association and trustee of the ACH Network, it is one of the safest and most reliable payment systems in existence. All ACH Network payments are protected under federal law in case of fraud or error.

How Much Do ACH Transactions Cost?

Many transfer methods can be costly, but ACH transfers are often less expensive than other methods of payment. Though processing payments are subject to your merchant or bank account provider, the ACH avoids service fees from card networks by using bank account and routing information directly. Some providers may add a fee or added cost to your transfer, ranging from $1 to $3 per transaction. It is a good idea to verify this with your bank to avoid any unexpected fees or delays in processing.

How Long Does the ACH Transfer Process Take?

ACH transfer delivery can take several days, though a recent announcement by the National Automated Clearing House Association stated that same-day transaction processing would be available by early 2018. There may be an additional fee associated with same-day processing, but it would allow for an even faster transfer of funds between businesses and for employer payroll processing.

In the meantime, you can expect a delay of up to two business days for ACH payments to process for most financial institutions.

There are definite advantages to using ACH transfers as your primary payment process. For secure, inexpensive, and fast payment processing, using ACH transfers is a verified method backed by a reliable institution and used by many online vendors.

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