What is ACH?: Quick Facts About the Automated Clearing House (ACH) Network

Posted July 1, 2013

The Automated Clearing House Network
The Automated Clearing House (ACH) Network is the backbone for the electronic movement of money and payment-related data.  It provides a safe, secure, electronic network for direct consumer, business, and government payments, and annually facilitates billions of Direct Deposit via ACH and Direct Payment via ACH transactions.  The Network, which is used by all types of financial institutions, is governed by the fair and equitable NACHA Operating Rules, which guide risk management and create payment certainty for all participants.

ACH Network: Quick Facts

  • The ACH Network is a batch processing system in which financial institutions accumulate ACH transactions throughout the day for later batch processing.
  • Instead of using paper to carry necessary transaction information, such as with checks, ACH Network transactions are transmitted electronically, allowing for faster processing times and cost savings.
  • The ACH Network processes two types of transactions: Direct Deposits via ACH and Direct Payments via ACH.
  • Direct Deposit via ACH is the deposit of funds for payroll, employee expense reimbursement, government benefits, tax and other refunds, and annuities and interest payments. It includes any ACH credit payment from a business or government to a consumer.
  • Direct Payment via ACH is the use of funds to make a payment. Individuals or organizations can make a Direct Payment via ACH as either an ACH credit or ACH debit.

    •  A Direct Payment processed as an ACH credit pushes funds into an account. An example of this is when a consumer initiates a payment through his/her bank or credit union to pay a bill.
    • A Direct Payment processed as an ACH debit pulls funds from an account.  An example of this is when a consumer establishes a recurring monthly payment for a mortgage or utility bill, and his/her account is debited automatically.  
  • ACH credit and ACH debit transactions process quickly.  Settlement, or the transfer of funds from one financial institution to another to complete the transaction, generally takes only one business days.
  • Specifically, the NACHA Operating Rules require that ACH credits settle in one to two business days and ACH debits settle on the next business day. 

ACH Network: 2013 Quick Statistics

  • ACH Network volume grew to almost 22 billion electronic payments, an increase of 4 percent over 2012
  • The total dollar value of ACH Network transactions was $38.7 trillion, an increase of almost 5 percent over 2012.
  • There were 3.3 billion WEB transactions, totaling $1.5 trillion.
  • The volume of B2B transactions increased 6.7 percent over 2012.
  • Consumer-initiated payment entries increased by 4.6 percent over 2012.  
  • Recurring payments, which account for almost half of total ACH Network volume, grew by 5.2 percent over 2012.

For more information about the ACH Network, please visit www.nacha.org/ach-network.

Access: Public