It wasn’t long ago that paying bills or getting a paycheck meant waiting for a check to move through the mail system. Nowadays, many of these payments happen online through an electronic network called the Automated Clearing House or ACH. Trillions of dollars move through the ACH each year. Plus, people are increasingly using this network in place of credit card and debit card payments. But exactly what are ACH payments?
What Are ACH Payments?
In the simplest terms, ACH payments are electronic payments sent from one bank account to another account at a different bank. They are called ACH payments because they go through the ACH, or Automated Clearing House. This is an electronic network that businesses, consumers and financial institutions use to accept and disburse payments.
As more and more business moves online, banks and businesses continue to use ACH payments more often. The ACH currently moves about $43 trillion each year through payments like payroll direct deposit, government and Social Security benefits, mortgage and bill payments and online banking payments.
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