Periodically throughout the day, your bank batches the NACHA files they’ve received and sends them to the Federal Reserve. Only an authorized financial institution can “originate” an ACH payment on behalf of a payor or payee. Each NACHA file includes information about the ACH payment(s) it describes, including account and routing numbers, direction (debit or credit), and payment amounts. A NACHA file is a set of electronic instructions that triggers an ACH payment when it’s uploaded to your bank’s secure server. When one of your customers initiates an ACH payment through your app or website, a NACHA file is generated. ![]() Only an authorized financial institution can “originate” an ACH payment on behalf of a payor or payee.įor this reason, tech companies that make ACH payments available to their customers typically partner with a bank or with a banking-as-a-service platform that has one or more bank relationships built in. Finally, we’ll offer three simple steps to get started. We’ll walk you through an ACH payment and talk about how it works for tech companies and their customers. In it, we’ll briefly cover the history of ACH and define common terms. If you’re a decision maker at a tech company who’s thinking about whether and how to offer ACH to your customers, this guide is for you. How do I offer ACH payments to my customers?.What are the advantages and disadvantages of ACH?.But before you start building, you may want to ask yourself these questions: According to the Federal Reserve, it accounts for about 70% of all US payments by dollar value.Īs payment methods go, ACH is cost-effective, and the user experience is continually improving. In fact, it’s the most common way to transfer funds in the United States. ![]() Your customers want to move money-to pay you, to purchase goods and services, to fund their new accounts-and ACH is a tried-and-true way for them to do it. What is ACH and how do I set it up for my business?
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