What Is An ACH Payment? A Complete Guide For Merchants

More than 35.2 billion Automated Clearing House (ACH) payments were processed in 2025, making it one of the most widely used payment systems in the United States. Yet many growing companies still rely heavily on card payments, which leads to higher processing fees and friction for large or recurring transactions. For businesses serving US consumers or planning to expand into the US market, bank-based payment alternatives such as ACH are essential.

What is an ACH payment?

Established by the National Automated Clearing House Association (Nacha), ACH payments are electronic bank-to-bank transfers processed through the ACH network, a financial system that connects every bank and credit union in the United States.

Businesses and individuals widely use ACH payments for payroll and salary deposits, subscription and recurring billing, utility and insurance payments, vendor and supplier payouts, and government benefits and tax refunds.

​​How are ACH payments different from bank and card transfers?

ACH payments, wire transfers, and card payments are electronic fund transfers (ETFs) that move money between banks. However, each method relies on a different financial network and follows distinct processing models.

Network

ACH payments use the Nacha centralised network, while wire transfers are processed via the Fedwire Funds Service or SWIFT networks. Card payments rely on networks such as Visa or Mastercard and also pass through several intermediaries before reaching the merchant’s bank.

Settlement time

ACH payments are processed in batches, so they typically take one to three business days to settle, although same-day ACH is available in some cases. Wire transfers are processed in real time and complete within the same day (domestic), while card payments are usually authorised within seconds, but they may take one to three business days to settle.

Costs

ACH transfers usually cost between 0.26 and 0.50 USD per transaction. Wire transfers cost around 25-50 USD per transaction, and credit card processing fees range from 1.10% to 3.15% of the transaction amount.

ACH payments are more cost-effective than wire transfers and card payments because they move funds directly between bank accounts with fewer intermediaries.

Geographic reach

ACH transfers are available only within the US, but wire and card transfers support both domestic and international transactions.

Types of ACH payments

ACH transactions fall into two main categories based on who initiates the payment.

Direct deposit (ACH credit)

The ACH network processed 8.74 billion direct deposits in 2025.

Direct deposits occur when the payer initiates the transfer, pushing funds from their bank account to the recipient’s account. For example, a company can run payroll using ACH credit to send wages directly to the employee’s account.

Nearly 93% of American workers receive their salaries via ACH.

Direct payment (ACH Debit)

ACH debits occur when the recipient pulls the funds from the payer’s bank account after receiving authorisation. For example, when a user subscribes to Netflix, the company automatically debits the user’s account each month.

When a customer chooses to pay directly from their bank account on e-commerce platforms, the transaction is typically processed via ACH debit.

How do ACH payments work?

With ACH payments, the originator initiates the transaction, and the receiver’s bank account is credited or debited.

• ACH operator/Nacha: sets the rules for the ACH network and routes the ACH transactions between financial institutions
• Originating Depository Financial Institution (ODFI): Receives the payment request from the originator and submits it to the ACH network
• Receiving Depository Financial Institution (RDFI) – Receives the ACH transaction and applies it to the receiver’s account.

The workflow varies slightly between ACH credits and debits, but the core steps are as follows:

How long do ACH transfers take?

The ACH network processes payments in batches four times per day, and most ACH transfers settle within one to three business days.

Businesses and individuals can also choose to process ACH credits as same-day, next-day, or two-day payments. In Q2 2025, same-day ACH transfers settled 336.4 million payments worth 980.3 billion USD.

What are the benefits of accepting ACH payments?

For many merchants, especially those managing recurring billing or high-value transactions, ACH payments offer a practical alternative to card and wire transfers.

• Lower transaction costs: ACH fees are typically lower than for card payments, wire transfers, and checks. Some providers also offer volume discounts for frequent ACH processing.
• Improved cash flow management: Businesses can schedule ACH payments in advance, improving the predictability of incoming funds and enabling finance teams to manage operating expenses, payroll, and vendor payments more effectively.
• Fewer payment failures: ACH payments are linked directly to bank accounts, unlike card payments, which are more prone to declines due to limits, expiry, or replacement. As a result, ACH payments reduce payment interruptions, particularly for membership-based businesses.
• Secure bank-to-bank transfers: ACH payments move through a regulated banking network that uses encryption and adheres to strict security protocols to protect both merchants and customers from fraud.
• Higher conversion rates among US consumers: ACH payments are widely trusted by American consumers. By accepting ACH payments, businesses can serve customers who prefer bank transfers over card payments.

Challenges of ACH payments

While ACH payments offer clear advantages, they also pose a few operational challenges businesses should consider.

• Transaction limits: Banks may often impose daily or monthly transaction limits to manage risk, which can restrict larger payments or high-volume processing.
• Complex reversal rules: ACH payments can be reversed due to insufficient funds, incorrect account details, or unauthorised activity. When a transaction fails, businesses may incur fees such as non-sufficient funds (NSF) fees or payment reversal fees.
• Lack of rewards: ACH does not offer rewards or cashback programs, unlike card payments.
• Slower processing times: ACH payments typically take one to three business days to settle as the network processes transactions in batches. In contrast, card payments are authorised almost instantly.
• Limited international use: ACH payments primarily support domestic transactions within the United States. Businesses that operate globally may need alternative payment methods, such as cards or international bank transfers, to accept payments from customers in other countries.

When should businesses use ACH payments?

For many businesses, ACH payments work best as part of a broader payment strategy rather than a standalone solution.

ACH payments are a strong option for businesses that:

• Serves customers or partners in the US
• Processes recurring or subscription payments
• Handle payroll or mass payouts
• Want to reduce card processing fees.

Accept ACH payments with Unlimit

As businesses expand globally, relying on a single payment method is rarely enough to meet customer expectations. Each market has its own preferences, regulations, and expectations.

In the US, consumers and businesses rely on bank transfers for everyday financial activity. For businesses entering this market, ACH payments offer a practical way to reach customers while reducing payment processing costs.

Traditionally, this required establishing a US-based entity and local banking relationships, a model that is hard to scale in a borderless economy. 

Unlimit removes that barrier by providing a global financial layer that merchants can use to access ACH transfers, along with over 1,000 other payment methods, without having to build their local infrastructure from scratch.

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