ACH payment processing stands for Automated Clearing House Network. The ACH payment processing network is a national network designed for electronic transfer of funds between bank accounts. Both ACH credit and debit transactions can be transacted through the ACH payment processing network. ACH credit transactions are known also known as direct deposit.

The ACH payment processing network began operations in the early1970s. Since that time, the ACH payment processing network has used for electronic transfer of funds for ACH credit and debit transactions by individuals, businesses, financial institutions and government organizations for ACH credit and debits.

The ACH payment processing network serves 20,000 financial institutions, 3.5 million businesses, and 115 million individuals. The ACH payment processing network is a batch-oriented electronic transfer of funds system for ACH credit and debit transactions.

Governed by the NACHA Operating Rules, the ACH payment processing network provides for interbank clearing of electronic transfer of funds payments for participating depository financial institutions. NACHA is a not-for-profit association which develops rules and business practices for electronic transfer of funds for all ACH credit and debit transactions flowing through the ACH payment processing network.

For past several years there has been unparalleled growth in the ACH payment processing industry, driven largely by the increasing acceptance of ACH credit and debit transactions. Today, ACH payment processing is the most cost effective system for electronic transfer of funds within the United States.

How ACH Payment Processing Works

The Federal Reserve and Electronic Payments Network act as central clearing facilities through which financial institutions transmit or receive credit and debit entries. Checking, savings, loan and financial institution general ledger accounts are all acceptable for electronic transfer of funds by ACH credit or debit through the ACH payment processing network.

ACH credit or debit transactions are electronically transmitted with no need for paper documentation. The growing popularity of ACH payment processing for the electronic transfer of funds is paving the way for a paperless universe where checks, stamps, envelopes, and paper bills are obsolete.

Use of the ACH payment processing network for ACH credit and debit transactions results in better cash management capabilities and more efficient electronic transfer of funds for businesses and individuals.. ACH payment processing for ACH credit and debits saves money by simplifying, improving and automating operations leading to increased productivity and quicker electronic transfer of funds.

ACH Payment Processing:  Recurring Billing

Recurring debits are one of the most popular forms of ACH payment processing for the electronic transfer of funds. Recurring payments means that an account is debited at specified intervals to meet the obligations of a recurring bill.. ACH payment processing applications include insurance premiums, mortgage and rent payments, utility payments, installment payments, membership, and other recurring obligations.

Consumers are quite comfortable with ACH payment processing. Most consumers already pay one or more household bills through a recurring ACH payment processing direct debit. And many Americans receive their paycheck via an ACH credit direct deposit.