ACH stands for Automatic Clearing House. ACH payments are electronic payments that are created when a customer or business gives you authorization to debit directly the customer’s checking or savings account for the purpose of bill payment. ACH payments are faster than checks and provide your customers with an alternative to using credit cards. However, unlike credit card processing the ACH network cannot provide real-time authorization of funds.

Please note that NACHA is the Rule-making standards body for the ACH Network and other payments systems. See www.nacha.org for details. You must understand that the purpose of this section of the SmarterPayment manual is not to replace your research and compliance with NACHA regulations but to provide a basis of understanding of ACH payments. You must remember that you are responsible for obtaining authorization for an ACH payment from your customers and for managing customer enrollment, payment actions (for example, making changes to amounts/dates), payment responses (for example, notifying customers of insufficient funds or other returns) and your compliance with NACHA.