Vopay.com Reveals 5 Important Things To Know About ACH Payments by VoPay Lyrics
What is an ACH payment and how does it work? Below are is some important information on ACH payments that can help you get a basic understanding of what it they areis all about:
1. Definition
ACH payments are a type of bank-to-bank electronic funds transfers that are collected and processed through the US-based financial network known as Automated Clearing House or ACH. Also called direct payments, they are automated and digital, and make various financial transactions today more convenient and quick for all parties involved.
2. Types
When we talk about ACH payments, there are two types that often get mentioned. The first one is an ACH debit payment, which is a type of payment that is typically used by consumers to pay for goods and services they purchase. An example of this is when you pay for your electricity or water bill and you enter your bank account number, routing number, and other information so that your bank can automatically pull or withdraw funds from your account via debit to pay for your bill.
The second type of ACH payment is an ACH credit payment, which is typically used by business entities to pay for services rendered by their employees or goods provided by suppliers or vendors. In this case, the payer initiates the ACH payment processing so that the funds can be pushed into or sent to the bank account of the receiver.
3. Examples
You might not realize this but you have been very likely using ACH payment processing for a while now. Below are some examples of ACH transactions that you have probably done several times alreadybefore:
• Paying your electric, water, internet, and or other utility bills with your bank account
• Receiving direct deposits for your paychecks from your employer
• Sending money from your bank account to your family member’ssomeone else’s bank account
• Paying the IRS using their online method
4. The stepsSteps
The ACH process consists of 7 steps.
Step 1: ACH payment is made by an individual, company, or bank.
Step 2: ACH entry is submitted by the Originating Depository Financial Institution.
Step 3: ACH entries are sent in batches by the Originating Depository Financial Institution to an ACH processing operator.
Step 4: ACH entries are sorted by the ACH processing operator to determine which ones are payments and which ones are deposits.
Step 5: Sorted ACH entries are forwarded by the ACH processing operator to their respective Receiving Depository Financial Institutions.
Step 6: Receiving bank makes sure that the Originating Depository Financial Institution has sufficient funds for the transaction.
Step 7: Receiving bank proceeds to debit or credit the funds.
5. The bBenefits
There are many good reasons why ACH payments are used by many people and businessesso popular.
Below are examplesSome of the important benefits of ACH include:
Easy, cheap, and convenient – Unlike other payment methods, ACH payments do not require paper checks, pens, or filing cabinetsmanual processing. They also do not charge cost as much as the others per transaction tooother transactions.
Available worldwide - Are you in Canada and wondering if you can use ACH to send money internationally? Have you tried looking up “ACH payment processing Canada” online for answers? Do the search results of your “ACH payment processing Canada” query confuse you? There is no worldwide ACH network or system, but a lot of countries have similar versions that work with ACH. It is best to check with your bank for more information.
Source: https://vopay.com/ach/
1. Definition
ACH payments are a type of bank-to-bank electronic funds transfers that are collected and processed through the US-based financial network known as Automated Clearing House or ACH. Also called direct payments, they are automated and digital, and make various financial transactions today more convenient and quick for all parties involved.
2. Types
When we talk about ACH payments, there are two types that often get mentioned. The first one is an ACH debit payment, which is a type of payment that is typically used by consumers to pay for goods and services they purchase. An example of this is when you pay for your electricity or water bill and you enter your bank account number, routing number, and other information so that your bank can automatically pull or withdraw funds from your account via debit to pay for your bill.
The second type of ACH payment is an ACH credit payment, which is typically used by business entities to pay for services rendered by their employees or goods provided by suppliers or vendors. In this case, the payer initiates the ACH payment processing so that the funds can be pushed into or sent to the bank account of the receiver.
3. Examples
You might not realize this but you have been very likely using ACH payment processing for a while now. Below are some examples of ACH transactions that you have probably done several times alreadybefore:
• Paying your electric, water, internet, and or other utility bills with your bank account
• Receiving direct deposits for your paychecks from your employer
• Sending money from your bank account to your family member’ssomeone else’s bank account
• Paying the IRS using their online method
4. The stepsSteps
The ACH process consists of 7 steps.
Step 1: ACH payment is made by an individual, company, or bank.
Step 2: ACH entry is submitted by the Originating Depository Financial Institution.
Step 3: ACH entries are sent in batches by the Originating Depository Financial Institution to an ACH processing operator.
Step 4: ACH entries are sorted by the ACH processing operator to determine which ones are payments and which ones are deposits.
Step 5: Sorted ACH entries are forwarded by the ACH processing operator to their respective Receiving Depository Financial Institutions.
Step 6: Receiving bank makes sure that the Originating Depository Financial Institution has sufficient funds for the transaction.
Step 7: Receiving bank proceeds to debit or credit the funds.
5. The bBenefits
There are many good reasons why ACH payments are used by many people and businessesso popular.
Below are examplesSome of the important benefits of ACH include:
Easy, cheap, and convenient – Unlike other payment methods, ACH payments do not require paper checks, pens, or filing cabinetsmanual processing. They also do not charge cost as much as the others per transaction tooother transactions.
Available worldwide - Are you in Canada and wondering if you can use ACH to send money internationally? Have you tried looking up “ACH payment processing Canada” online for answers? Do the search results of your “ACH payment processing Canada” query confuse you? There is no worldwide ACH network or system, but a lot of countries have similar versions that work with ACH. It is best to check with your bank for more information.
Source: https://vopay.com/ach/