ACH stands for Automated Clearing House. This service allows merchants to electronically debit customer’s personal and business checking accounts. It will allow merchants to accept “Check by Phone” for one time payments or it can be coupled with Recurring Payments (below) to collect payments on a schedule, such as monthly, weekly, etc.

Often referred to as direct payments, ACH is a U.S. financial network that facilitates electronic payments and money transfers from one bank account to another without having to resort to credit card networks, wire transfers, paper checks or cash.

Benefit of ACH and Recurring Payments for Businesses

Recurring payments are automatic payments that an account holder allows to be deducted from a bank account or credit or debit card on a regular billing cycle. This type of payment can be helpful for both the party receiving the money and the one being billed. Because ACH is linked to bank accounts, which consumers do not change as often as credit cards, it is a great way for businesses to cut down on involuntary payment churn.

Easier and More Cost-effective for Consumers

ACH payments can be very helpful for consumers because they are more cost-efficient and easier than paying with a debit or credit card or writing checks. Not only is the settlement process very fast, but most ACH transfers are free, depending on your bank and the kind of transfer involved.