ACH

The Automated Clearing House (ACH) is a nationwide network that processes and clears funds between financial institutions. The system operates as a central authority, enabling and facilitating the task of digitally moving payments and debits from one bank account to another.

ACH transactions provide an alternative way to transfer money, without going through card networks or relying on legacy methods such as wire transfers, paper checks, or cash. Having this central hub allows any business to offer customer services such as direct deposit and online bill payment.

The ACH has over 10,000  members, including banks, credit unions, and other financial institutions. Each is identified by its own unique 9-digit routing number. The network is a service of the US Dept of Treasury, and is overseen by Nacha, formerly the National Automated Clearing House Association (NACHA). Nacha sets and coordinates the rules governing ACH payment processing.

In its original incarnation, the ACH network only worked between U.S. accounts, and typically required two or three business days for monies to clear. Recent rule changes include the addition of International ACH Transactions (IAT) for global transactions and the ability for most transactions to clear on the same business day.