ACH, Automated Clearing House, is a payment network that aids the electronic transfer of money between all bank and credit union accounts in the United States. ACH payments provide merchants with options to conduct their financial transactions securely and cost effectively. This type of payment has become one of the many reliable payment solutions for businesses trying to optimise and streamline their payment process for the US market.
According to data from NACHA, which is the organisation responsible for the ACH network, the number of payment volumes by type on the ACH network in 2025 is as follows:
- Business-to-business transactions reached 8.08 billion payments and USD 63.11 trillion transferred.
- Person-to-person transactions amounted to 469.66 million payments and USD 775.72 billion transferred.
- Consumer bill payments and other debit transactions grossed 17.17 billion payments and USD 12.04 trillion transferred.
- Direct deposit payments were 8.74 billion and USD 16.5 trillion transferred.
In this article, we will explore the ACH payment method, how it works, the key differences when compared to bank transfers and its benefits for businesses.
What are ACH payments?
An ACH payment is the electronic transfer of money between accounts at different financial institutions, such as banks and credit unions, through the ACH network.
This payment method is popular for bill payments, invoice settlement and payroll processing. ACH payments play a critical role in automating payments, reducing administrative burdens for businesses and offering a cost effective option for domestic transactions within the US.
Types of ACH transactions?
ACH credit payment
In ACH credit transactions, the funds are deposited into the recipient's account, authorised by the payer to the ACH network through their bank. Funds are pushed electronically from one account to another. A common example of this is depositing into a salary account, where an employer pushes funds into their employees' bank accounts.
ACH debit payment
In this type of ACH payment, funds are pulled from an account by the business or service provider. An instance includes the payment of utility bills or subscription services, where the business automatically debits the authorised customer account at scheduled intervals.
How do ACH payments work?
ACH payments operate through a multi-step process to secure and efficiently transfer funds from one account to the other. It is important to note that this type of payment transaction is not instantaneous. Standard ACH payments usually take one to three business days to process, although businesses can opt for same-day ACH payments, which clear within a few hours. This might not be supported by every financial institution, but it is always advisable to confirm. However, holidays and weekends can cause delays in the transaction settlement. Below is a step-by-step breakdown of how an ACH payment works.
Payment initiation
The process begins when a person or organisation authorises a direct payment from their bank account.
Request submission
Once the payment is authorised by the payer, the financial institution receives the submission and sends it to the ACH network in batches alongside other initiated payments.
Batch processing
Unlike real-time payments, ACH payment processing occurs in batches. The batch of transaction submissions is received and processed together at specific intervals throughout the day.
Clearing and settlement
After the ACH network processes the transaction, it is sent to the receiving bank. The receiving bank verifies the details and ensures the payer's account has enough funds.
Completion
If everything checks out, the funds are either debited from the sender's account and credited to the recipient's account (for payments) or pulled from the payer's account, as in the direct debit ACH example.
What are the use cases for ACH payments?
ACH payment is versatile and can be applied in numerous business scenarios such as:
Recurring payments
It is ideal for merchants that operate subscription business models or require processing payments regularly, such as utilities, insurance payouts or memberships.
Payroll processing
ACH is widely used for direct deposits, allowing businesses to automate employee salary payments efficiently.
Business-to-business
ACH transactions offer a cost effective solution for B2B payments, such as settling invoices between suppliers and retailers.
Government payments
Governments often use ACH to issue tax refunds, benefit distributions and other official payments.
Non-profit donations
ACH network facilitates more straightforward recurring donations for charitable organisations, simplifying fundraising.
What is the difference between ACH payments and Bank transfers?
Although Wire transfers and ACH payments both allow for the electronic transfer of funds, there are some key distinctions between them, such as the following:
Range of geography
ACH payments are made through a US-based payment network and can only be made within the US. On the other hand, Wire transfers are vital for international transactions since they can be carried out anywhere in the world.
Cost of transaction
In general, ACH payments are significantly less expensive than wire transfers. ACH payments have fixed, lower fees than wire transfers, which makes them an appealing option for businesses, especially for recurring payments. Wire transfers can cost up to USD 0 to USD 50 per transaction.
Duration for processing
Wire transfers are quicker and frequently conclude the same day, even for transactions involving foreign parties. Although they have a same day option, ACH payments are primarily available within the US. They usually take up to three business days to process. However, same day ACH transactions are becoming more common, although do usually have higher transaction fees.
Payment safety
Both wire transfers and ACH payments use strong security measures for payment processing. To protect sensitive data, ACH payments rely on authentication and encryption procedures. On the other hand, wire transfers are processed individually through secure banking networks and, while highly protected, are typically irreversible once completed, which can increase risk if incorrect details are provided or fraud occurs.
What are the benefits of ACH payments for merchants?
Recurring payments
With ACH payments, businesses can set up recurring payments for customers, which is particularly helpful for membership fees, subscription services and other forms of continuous billing. This can improve convenience for consumers while reducing the administrative burden for merchants and lowering the chance of late payments.
Improved customer retention
Offering preferred local payments to consumers can be a great strategy for merchants. By accepting ACH as a payment method, merchants provide customers witha convenient payment option with which they are familiar. This convenience can increase customer satisfaction and loyalty, improving customer retention.
Reduced payment errors
With ACH payments, the likelihood of payment errors, such as incorrect entries or bounced checks, is significantly reduced. Payments are automated and handled through bank transfers, so merchants can spend less time correcting errors or dealing with failed transactions, improving overall efficiency.
What are the downsides of ACH payments?
Limited international reach
ACH is extremely efficient for domestic transactions in the United States, but its global reach is limited. While international ACH transfers are becoming possible, they are not as widely supported and frequently require additional steps or completely different systems, making ACH transactions less suitable for businesses with global customer bases.
Delayed fund availability
ACH transactions can take several days to process, usually between one and three business days, but it can be more dependent on the financial institutionsinvolved. This delay may be a disadvantage for businesses that require immediate access to funds or customers who expect faster processing times, especially in situations where real-time payments are critical.
Transfer limitations
Many banks impose daily or monthly limits on ACH transactions, which can restrict businesses that handle large sums or frequent transactions. These transaction caps may compel businesses to use alternative payment methods for larger payments, potentially decreasing their continued adoption of this payment option.
Trends in ACH payments
There are multiple trends impacting the future of transactions within the ACH network. Some of the trends include:
Increased volume
According to data from NACHA, ACH Network payment volume rose nearly 4.9% from 2024 to 35.2 billion payments in 2025, climbing to an average of 141 million daily transactions. The value of those payments reached USD 93 trillion, a 7.9% increase compared to 2024.
This trend predicts continued growth in the number of ACH transactions. As more businesses and consumers become aware of the benefits of ACH payments, they're likely to use this method more frequently. This increased adoption could lead to ACH becoming the dominant form of electronic payment for many types of transactions, particularly for regular payments like salaries, bills and subscriptions in the US.
International ACH
Although ACH payments have traditionally been used for domestic transactions in the United States, it is expected to play an increasing role in cross-border payments. International ACH transactions (IATs) are gaining popularity as a potentially lower-cost alternative to traditional wire transfers for global transactions.
To support this expansion, NACHA worked with the Office of Foreign Assets Control (OFAC) to develop an ACH format that includes detailed information about all parties involved in each transaction, increasing transparency and compliance with international regulations. The ACH network could significantly change the international payment landscape if this trend continues.
Payments made easy with emerchantpay
There are multiple payment methods that consumers across different regions are used to and prefer. As a global merchant, choosing the right payment provider is essential. The right provider can help merchants offer payment methods their consumers love and boost their business revenue.
emerchantpay is a leading global payments service provider for online, mobile and point of sale payment solutions. As a PCI Level 1 compliant PSP and acquirer, we empower merchants to craft a seamless and captivating payment experience for their consumers globally.
With a dedicated Account Manager and Risk Analyst, our payment experts work closely with merchants to ensure their business seamlessly meets their customers' online and offline payment needs while mitigating risk and focusing on growing their business.
Contact us today to learn more.