ACH

ACH is referred to moving of money electronically.  Essentially there is a communication network that uses the Federal Reserve Banking system to transfer money to and from checking/savings accounts. The Automated Clearing House is the name given to system that accomplishes the transfers.

NACHA at http://www.nacha.org/ is the agency that oversees and make regulatory changes to the ACH network. The vast majority of banks in the US participate in the ACH network and are bound by the ensuing regulations. The ACH network is only valid in the US and Puerto Rico. Worldwide ACH processing is a goal of many but the reality is that the technical burdens are overwhelming.

As we define ACH, we also say allowing the typical business  to collect a recurring payment without waiting for the customer to mail a physical check. By having the customer authorize the electronic debit to their account the transfer of funds is accomplished electronically.

A couple of important considerations are:

1) The monies are not transferred immediately. The transaction proceeds as if the customer has a valid account with the needed funds available. It may take 2-3 days (4 is the most except in rare cases) to receive information that confirms the transaction was valid. Funding typically takes place in 4 days.

2) The money is not guaranteed to be paid.   A transaction may be returned and the monies no transferred. We can re-collect automatically for NSF transaction (non sufficient funds) 

3) Fees are transaction based and typically cost about .32 to start. Volume breaks are available.