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How do online payments via ACH debit work?

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedApr 20231 min read

The process for accepting payments via ACH debit can vary significantly, depending on two key factors.

The process for accepting online payments via ACH debit can vary significantly. It is largely influenced by:

Whether your business accesses the ACH scheme directly, or goes through an intermediary
The countries that your business’ bank and customer’s bank are located in (Note: This guide focuses on transactions between US-based businesses and US-based customers)

In simple terms, ACH debit is a payment method which allows your business to collect funds owed by your customers, without your customer (the payer) needing to initiate the payment. (This kind of mechanism is referred to as a pull-based payment method, as you - the payee - can pull the funds directly from the payer's account.)

How to collect ACH Debit payments with GoCardless

1.

Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).

2.

Easily set up & schedule ACH Debit payments via payment pages on your website checkout or secure payment links.

3.

From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.

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Once a business sets itself up to accept ACH debit (AKA Direct Debit) payments from customers (whether directly or through an intermediary), the process to collect those payments looks like this:

guides > images > online-payments-guide-direct-debit-payment-process

The customer completes the merchant’s checkout process and elects to pay via ACH debit.
The customer is provided and completes an ACH debit authorization form (which may be online, paper-based, or via telephone).
The business (or the business’ ACH debit provider - e.g. GoCardless) submits the completed mandate to the bank, authorizing them to automatically collect payment when it’s due.
The business notifies the customer of the upcoming payment that will be collected from them, in a specified time in advance (learn more about the rules surrounding this in our guides to ACH authorization forms and Customer payment notifications).
The business submits a payment request via the ACH scheme.
The business’ (or ACH debit provider’s) sponsor bank (the bank that enables them to access the ACH scheme) and customer’s bank action the payment request when the payment becomes due, ensuring the correct amount is debited from the customer and credited to the business.
There is typically a clearance period between the payment due date and the date the funds are deposited into the business’ account (see our guide to ACH payment processing times).