The ACH Network is a batch processing system in the United States through which financial institutions can exchange electronic credit and debit transactions. The network is governed by NACHA and handles a large volume of both business-to-business and consumer transactions.
The ACH Network is used for a wide variety of financial transactions, including the following:
- direct deposit of payroll
- social security benefits
- tax refunds
- corporate payments to vendors
- consumer payments for insurance premiums
- mortgage loans,
- other types of bills
- electronic checks
- e-commerce payments
- charitable donations
Transactions within the ACH Network are processed in a secure and efficient manner. Financial institutions gather ACH entries throughout the day and batch them together for transmission during predetermined windows of time.
This consolidation of transactions helps reduce costs and increase speed and efficiency, making the ACH Network a vital component of the U.S. payments system.