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What is the ACH?

The ACH, or Automated Clearing House, is an electronic system that connects every financial institution and bank in the United States together. The ACH Network allows easy transfers of money to be made from consumers to businesses and businesses-to-businesses (B2B). The transactions that occur in the ACH Network are securely processed by a central clearing house ran by an ACH Operator. Transactions that occur in the system are stored and processed in a batch mode. This way, each transaction does not have to be sent separately.

The Automated Clearing House was first established in 1972 in a joint effort between banks and the regional Federal Reserve to facilitate paperless check transactions. In 1978 all nationwide networks were linked. In 2001, the ACH Network had processed over one billion ACH transactions since its formation. In 2008, the network processed 18.2 billion ACH transactions alone. The system is widely used today. It is how we are able to pay for things over the Internet, use our debit cards, and receive direct deposits. The Automated Clearing House has completely changed the face of business.

ACH Debits

An ACH debit or ACH withdrawal is used by consumers and businesses alike. They are methods a person or business uses to make payments by allowing companies or businesses to electronically withdraw funds from his or her own bank account. In order for an ACH debit to be initiated, a person must give authorization to an entity to withdrawal funds from his or her own bank account. These debits are widely used by businesses and consumers to pay for a wide number of products and services.