What is ACH?
A network called ACH (Automated Clearing House) is used to transfer funds between bank accounts all over the US electronically. The National Automated Clearing House Association, also known as Nacha, is the company that manages it. It is also known as the ACH network or ACH scheme.
The ACH network has been used for payment processing since the 1970s. In 2021 alone, the use of ACH has grown exponentially. Payments are made internationally, as well as via government, consumer, and business-to-business transactions.
What is ACH Payment?
In the US, one kind of computerized bank-to-bank payment is known as an ACH payment. Instead of passing through card networks like Visa or Mastercard, it is made through the ACH network. A popular name for an ACH payment is an ACH transfer or ACH transaction.
ACH payments fall into two basic categories:
- Direct Deposits
- Direct Payments
All deposit payments made to consumers by businesses or the government are covered by direct deposit. Payroll, reimbursement for employee expenses, government benefits, tax and other refunds, as well as annuities and interest payments, are all included in this.
The use of money for making payments by either people or organizations, is referred to as direct payment. This sort of ACH transaction is the main topic of this guide; unless otherwise specified, any mention of an ACH payment, ACH transfer, or ACH transaction in this guide refers to Direct Payments.
ACH OF Bank of America
The Automated Clearing House (ACH) of Bank of America is an electronic payment delivery system that enables you to send or receive money digitally over the ACH network. It can assist you in making the most of the quick, precise, and effective method of electronic payments and collections made possible by ACH; giving you more control over the timing of payments posted to your bank accounts.
Automated Clearing House can help you:
- Improve forecasting – Cash flow forecasting is made simple by established settlement dates.
- Improve efficiency and accuracy – minimise the likelihood of errors when using manual processing
- Reduce the number of checks in circulation to lessen your susceptibility to check fraud and the chance that counterfeiters may get and replicate your account information.
- Reduce the costs involved with processing, printing, and storing paper-based payments.
- Quicken the collection process by adding additional collection items to daily processing by using later electronic deposit deadlines. Returns can be quicker received and automatically redeposited.
Features of Bank of America ACH Payments
Options for resolution:
Using the file, batch, or collection application, you can publish return entries from ACH-originated transactions as a consolidated entry or as separate entries.
Several methods of processing:
To keep track of your ACH files, provide file, batch, or per-item limits. We can alert you upon request when your restrictions are reached, either before or after a file is handled.
Options for preventing fraud:
Take a look at incoming ACH transactions and return any that you did not authorize. You can choose to block debits or certain entry class codes selectively, or you can block all valid incoming ACH transactions.
Options for returned items:
Once or twice, following our receipt of the things, automatically redeposit qualifying returned items. Returned items are reported utilizing internet, email, and file transmission delivery on a day-to-day basis.
Options for reporting:
Access reports that highlight received item detail, origination and returned item settlement reconciliation.
Prior to sending subsequent payments to your client or payee, ACH NOC Manager applies updated account information that the account holder’s bank supplied.
You may meet your security needs by choosing from various file and data transmission security options.
Benefits of using ACH Payments
Low cost – An ACH payment is often less expensive than using one of the more expensive card networks because it is not sent through their networks.
High retention – Involuntary churn occurs when credit and debit cards expire. Since a bank account is the source of funds for an ACH payment, the possibility of unintentional churn is much diminished.
Open to everyone – The ACH system allows anyone with a US bank account to make payments. This holds true for both clients and businesses.