Facilitating Automated Clearing House Processing
According to the National Automated Clearing House Association (NACHA), the ACH network is a batch processing system that banks and other financial institutions use to aggregate ACH transactions for processing, which typically happens three times each business day.
Electronic payments that go through Automated Clearing House (ACH) Network are ACH payments. Fund flow from one bank account to another through a centralized system that directs funds to their final destination. Such computerized payments can provide benefits to both merchants and consumers:
- Payments are inexpensive.
- They can be automated.
- Recordkeeping is often easier with electronic payments.
The Business Perspective
When payment is made via checks, businesses must wait for the mail to arrive following which they should deposit the check with a bank and await clearance. Payments sometimes get lost, and entering those payments into a recordkeeping system is labor-intensive.
Less Expensive Than Cards
Even for businesses that accept payments by credit card, it is oftentimes less expensive to process the same through an ACH. Especially while collecting numerous recurring payments, the savings add up from each transaction.
The Consumer Perspective
Easy of Payments
With no need for consumers to write and reorder checks when they run out, they save themselves an expense and hassle. Their credit cards are not charged as the funds come directly from their bank account.
When using ACH payments, customers need not keep an eye out for bills—or act when payments are due. For better or worse, everything runs on autopilot.