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All About ACH Routing Numbers

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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 editedFeb 20232 min read

One of the big challenges as a business owner is figuring out all the different ways you can accept payments, and how you should go about this. The number of options can be overwhelming, and it’s difficult to know which is the best choice for your company. One popular option is ACH payment, a pull-based system that allows you to decide when you get paid.

ACH payments have plenty of benefits, which is why so many different businesses choose to use them. However, there are a few things that you need to understand before you can start accepting payments in this way. Keep reading to find out the answers to questions such as “what is an ACH payment?” and to find out how to make an ACH payment.

What is an ACH payment?

Before getting into the specifics of how to make an ACH payment, it’s important to first establish what this payment system is exactly. Put simply, ACH payments are a form of electronic payment that involves transfer of funds from one bank to another. This cuts out the middle men of wire transfers, card networks and paper checks.

ACH refers to the Automated Clearing House network, which is a US-based network that is used for processing the transfer of funds. If you want to process these kinds of payments, then you must be a registered business entity within the United States.

How to make an ACH payment

There are several steps involved in the ACH payment process. Since this is a pull-based method, the transfer of funds is actually initiated by the payee, provided that the customer has given authorization. The steps are as follows:

A customer agrees to make the payment, which is often for regular services such as utilities bills, insurance payments or SaaS.
The customer must sign an authorization form, which may be either on paper or in a digital format. This form expresses their agreement for the payee to collect funds on the due date, removing the need for them to manually make these payments.
When it’s time to collect the payment, the payee must initiate the transfer of funds through an Originating Depository Financial Institution (ODFI), which is a payment processor that instructs the ACH debit system to take funds from the account.

What is an ACH routing number?

To withdraw funds from an account using the ACH network, you’ll need to be familiar with your ACH routing number. This is a nine-digit code that is used to uniquely identify financial institutions within the United States. Banks will use these routing numbers to direct the exchange of funds from one account to another.

Many people wonder if the ACH number is the same as a routing number. Well, the full term is actually ACH routing number, so these do indeed refer to the same number. You’ll find it at the bottom left corner of a check, or you can also go through your bank’s website.

Using GoCardless for ACH payments

GoCardless is an efficient way to accept payments from your clients. Customers will be required to provide authorization in a simple, one-time setup, and following this you will be able to automatically collect payments on their due date. This saves both you and your customers time, puts you in control of your cash flow, and reduces the risk of late payments.

What’s more, the payment intelligence system Success+ automatically attempts to recollect payments when they initially fail. On average, this results in around 70% of failed payments being collected, saving you from those awkward conversations where you need to chase up your customers.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.