Definition of Automated Clearing House (ACH)

Kanzka Razan  Venir

Automated Clearing House (ACH) is an electronic network used for financial transactions. It processes large volumes of transactions in batches. However, clearing interbank transactions can be of any kind, either a type of credit or debit. ACH is commonly used in the context of secure private electronic transfer systems that connect U.S. financial institutions. In simple words, ACH is an electronic network for the exchange of payment instructions among financial institutions, usually on behalf of customers. Examples of ACH are direct salary deposits, Direct deposits of government benefits such as social security, e-commerce related payments, business-to-business payments