ACH stands for Automated Clearing House. It is a centralized electronic network in the United States used by banks and credit unions to process electronic payments and money transfers between accounts
. The ACH system facilitates the transfer of funds for various types of transactions, including direct deposits (such as payroll), bill payments, vendor payments, and other low-value, non-urgent payments. It operates by batching transactions and settling them typically within one to two business days, with options for same-day processing available
. In essence, ACH payments allow money to move electronically between bank accounts without the need for paper checks, wire transfers, or cash, making it a widely used and efficient method for financial transactions in the U.S.
