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How to Make ACH Payments

As the world of digital commerce continues to grow, businesses are offering more and more online payment methods. For example, digital wallets like Apple Pay and financing options such as Buy Now, Pay Later from providers like Klarna are becoming commonplace on all types of e-commerce websites. One method that is growing in popularity is ACH payments.

These payments are made through the Automatic Clearing House network, which is usually shortened to ACH. They are made through a technology known as eChecks, which are essentially a digital version of traditional paper checks. Keep reading to find out how to make ACH payments and what information is needed to make an ACH payment.

In order to make these kinds of transactions, there are certain ACH payment details that you should have ready. These include:

  • Your full name.

  • Details of your account, including account number and the type of account (i.e. whether it is a personal or business account).

  • The routing or ABA number. If your account allows you to write checks, then you should find this information at the bottom of the check.

  • The transaction amount.

Usually, the payee will send you a request for all of these ACH details. This tends to be done through an online form, although it may also be carried out over the phone. In either case, the instructions should be clear, and they will be able to help you if you have any difficulties finding this information.

Different types of ACH transfers

The ACH details are slightly different depending on whether you are making or receiving a payment. You might hear people talking about ACH debit and ACH credit, and the meaning of this depends on which way the transaction is going. Basically, ACH debits are when you make a payment to someone else, and ACH credits are when someone else makes a payment to you.

The terms ‘pushing’ and ‘pulling’ funds are also used with ACH payments. This doesn’t actually refer to the direction in which the money is moving, but rather is related to who initiates the transfer. If the account owner initiates the transfer of funds out of their account, then you can say that they ‘push’ the funds. However, if the payee requests money and therefore initiates the transaction, you can say that they ‘pull’ the funds.

How much do ACH transfers cost?

After you’ve input ACH payment details and are ready to make the transaction, you may wonder how much it will cost you. This depends on the type of transaction that you are making. ACH debit transactions are generally free, unless you are using an expedited service. ACH credit transactions, on the other hand, may charge you a fee of around $3 if you are making a payment to a different bank.

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GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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