ACH Payment
An electronic bank-to-bank transfer through the Automated Clearing House network.
What is ACH Payment?
ACH (Automated Clearing House) payments are electronic transfers between bank accounts through a U.S. network managed by Nacha. Unlike card payments that settle in 1-2 days, traditional ACH takes 2-3 business days, though Same-Day ACH is now available. ACH is commonly used for direct deposits, bill payments, B2B transactions, and recurring billing. Processing costs are significantly lower than card payments—typically a flat fee or small percentage (0.5-1.5%) versus 2-3% for cards.
Why It Matters
ACH offers substantial savings on processing costs, especially for high-value B2B transactions or recurring payments. The trade-off is slower settlement and higher return risk (similar to bounced checks). For businesses with predictable receivables or B2B focus, ACH can dramatically reduce payment costs while maintaining convenience.
Related Terms
Same-Day ACH
ACH payments that settle within the same business day instead of 2-3 days.
Real-Time Payments (RTP)
A payment network enabling instant, irrevocable bank-to-bank transfers 24/7/365.
Wire Transfer
A direct, immediate bank-to-bank transfer typically used for large or urgent payments.
Recurring Billing
Automatically charging customers on a scheduled basis for subscriptions or ongoing services.
Frequently Asked Questions
Standard ACH takes 2-3 business days. Same-Day ACH settles within one business day but has transaction limits ($1 million per payment) and higher fees.
ACH is batched and lower cost but slower. Wire transfers are immediate but expensive ($15-$50 per transfer). ACH is ideal for routine payments; wires for urgent, high-value transfers.
Yes, ACH debits can be reversed within 2 business days for any reason, and up to 60 days for unauthorized transactions. This return risk is higher than card chargebacks.
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