What’s an ACH payment and how does it work?

ACH payments are electronic bank-to-bank transfers processed through the US Automated Clearing House network, commonly used for payroll, direct deposits, vendor bills, subscriptions, and recurring payments. They include ACH debits, in which a payee pulls authorized funds from a payer’s account, and ACH credits, in which a payer pushes funds to a recipient, with processing generally taking one to three days and some providers offering same-day service. Compared with wire transfers, ACH transactions are typically much less expensive and can offer limited reversal or return options, although they may be slower. While ACH is mainly intended for domestic US payments, International ACH Transactions can support certain cross-border transfers, and fintech providers may give non-US businesses access to USD accounts and ACH capabilities without requiring a US entity. Businesses must provide account and routing information, obtain authorization for debits or recurring payments, and manage risks including fraud, insufficient funds, delays, and compliance requirements.

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