What is ACH?

ACH (Automated Clearing House) is an electronic payment network used to transfer money directly between bank accounts in the United States. Businesses commonly use ACH payments for payroll, bill payments, vendor payments, direct deposits, and customer invoicing because they are generally less expensive than wire transfers.

Example: A business pays a vendor by sending an ACH payment directly from its bank account to the vendor's bank account.

Related terms: Accounts Payable, Bill Pay, Invoice