Automated Clearing House (ACH) payments occur daily in the United States and are playing an increasing role in consumer and business financial transactions.
ACH is a national clearing house in the United States for processing electronic fund transfers (EFT) and is governed by the Federal Reserve and NACHA (the Electronic Payment Association).
ACH payments can be in the form of a debit or credit card transaction for person-to-person, business-to-customer and business-to-business encounters.
Credit card transactions occur instantly, but debit card transactions are like checks. While debit payments file faster than paper checks, they can still bounce or take days to process.
Common types of ACH transactions are web-initiated, prearranged payment and deposits for recurring billing/payments and corporate cash disbursement for business-to-business transactions.
In the first quarter of 2009, almost 92 percent of ACH transactions were commercial. The rest were from the government. Of the commercial ACH transactions, 65 percent were debit and 35 percent were credit.