This saved financial institutions significant amounts of money and increased the speed of which checks cleared.ĪCH Processing now is done quickly, efficiently, and electronically multiple times a day. Banks were allowed to process checks electronically via ACH. With the passage of a federal law known as Check 21 in 2004, this costly and inefficient process of physically transporting checks changed. These so-called “freight dog” pilots moved billions of checks for banks each year - paychecks, mortgage payments, benefit payments, and much, much, more. Aircraft were filled to capacity with clear plastic bags stuffed with checks needing to quickly go from and to banks all over the country.
How ACH Processing WorksĪ few decades ago, the night skies were filled with hundreds of cargo pilots flying paper checks. ACH payments are increasingly less limited by payment time restrictions as funds sent via ACH are now available faster than ever. Same-day ACH payments - for individuals, businesses, and governments - have grown rapidly in the last five years. And while ACH payment processing is not new technology, it continues to grow year-over-year, according to statistics published by NACHA. NACHA, a not-for-profit trade association established in 1974, is funded by the 440+ financial institutions that it governs. ACH payments and ACH withdrawals are processed through the ACH network, and subject to rules and regulations established by National Automated Clearing House Association (NACHA). What is ACH Processing?ĪCH processing refers to the action of sending or receiving money electronically. Whether you’re sending or receiving funds, payment processing with ACH checks is straightforward and simple. Trillions of dollars are transferred, and billions of payments are made each year via the ACH network. On the financial institution end, transactions are ultimately processed in large batches of payments, several times a day. From the user-end, an ACH payment is made from one individual or organization to another. What is an ACH check?Īn ACH check is an electronic transfer of funds without a paper check, a credit card, a wire transfer, or an exchange of cash.
Lastly, this article will explore the potential benefits of, as an ACH processing option for you.
Additionally, it will review ACH processing and clearing times, different types of ACH payments, and some of the benefits of ACH payment processing. This article will discuss what an ACH check is and how ACH check payments work. If you’ve ever received a direct deposit payment from an employer or agency, you have received an ACH check. Although the term may be unfamiliar to many consumers, most have likely dealt with ACH checks before. ACH (Automated Clearing House) checks are essentially electronic checks (sometimes called e-checks), or paperless checks.
0 kommentar(er)
