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What Is an ACH Payment API?

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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 20232 min read

A secure, streamlined payment processing system is essential for sales. An ACH payment API offers a way to enable bank-to-bank account transfers, and if your business accepts credit card payments there’s a good chance you already have a suitable API in place. Here’s a closer look at how this type of platform works and what to look for.

How do ACH transactions work?

In the United States, transfers between bank accounts use the Automated Clearing House (ACH) Network. ACH transfers are overseen by the National Automated Clearing House Association (NACHA) including transfers between both personal and business bank accounts. To enable an ACH transfer, you’ll need to apply the relevant NACHA code. The payment is then facilitated with the cooperation of the banks or credit unions at either end of the transaction.

One common example of an ACH transaction is direct deposit. This enables business owners to pay employees directly via bank account transfer. However, ACH payment processing encompasses both debits and credits. In addition to direct deposit, it can be used to send payments for services received or pay bills. Read more about how to make an ACH payment.

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1.

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

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

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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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What is an ACH payment API?

Now that we’ve covered ACH payments, how do they relate to an API? An API, or application program interface, uses specialty code specifically designed to handle a request like payment processing. In a nutshell, this API code includes all the protocols and routines needed to securely handle online payments. Most online payments involve an API payment gateway, including e-commerce and online credit card payments. Different APIs can work together. For example, a business website might use a payment acceptance API combined with an authorization API for added security.

An ACH payment API allows developers to put the coding in place to enable ACH transactions. It creates custom connections between the bank, business, and client accounts and puts the rules in place to protect these connections.

How does an ACH API work?

Not all APIs are the same. Businesses now have more payment processing options than ever to choose from. Similarly, non-profit payment processing offers plenty of options. If you’re already using an API payment gateway to accept credit cards, you might be able to integrate an ACH API to accept bank accounts.

Your choice of application program interface offers plenty of flexibility. You could integrate it into your business app and website, as well as into your existing finance system. A developer can tweak the API to best suit business needs, including added layers of security on top of ACH transfers.

ACH payment integration features

What exactly does ACH payment integration involve? The primary goal of any ACH API is to connect a business to the ACH network. However, there are several other features that can be added on to benefit the business. When comparing your options, you could look for standout features including the following:

Bank account verification
Microdeposits
Taking transaction fees
Accept ACH payments instantly
Fraud monitoring
Numerous payment options
Linking merchant accounts
Identity authorization
Tokenization
Consumer credit checks
Setting up recurring payments
Integration with digital wallets

Some businesses might use their API as a payment gateway alone, while others will link additional back-end APIs for additional functionality. To ensure ACH payment integration, a developer needs to look at the code’s functionality and documentation to see whether it will fit into your system.

Is an ACH payment processing API right for you?

Before you integrate an ACH API into your payment processing platform, there are a few factors to consider. An ACH payment processing API is best suited to businesses with a US-based client base, as it uses the US-based ACH system. You should also consider transaction fees and transfer rates, which will vary depending on location. Does your current payment processor already offer ACH processing, or will you need a separate component? Do you currently use a payment API that easily integrates with an ACH API?

For smaller businesses, an ACH API might not be necessary. Creating custom code to transfer ACH payments can involve ongoing management, including error handling and transaction logging. Be sure to weigh all options carefully, including API features and integration.

We can help

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.