ACH stands for Automated Clearing House. An ACH transaction is an electronic money transfer between participating financial institutions. The automatic clearing house network (ACH Network) is processing and delivery system that provides for distribution and settlement of electronic credits and debits among financial institutions. Common applications include direct deposit for payroll and direct debit for automated loan payments, etc.

In 2000, the ACH began releasing a wave of new applications collectively referred to as “e-check” applications. These applications make it possible to accept payments by phone, online, and even the conversion of mailed in checks to electronic items.

Another variant of ACH transactions are “Same Day ACH” where payments and settlement are initiated and settled the same day. Also, “Real Time Payments” transactions might be also available, where payments are initiated and settled almost instantaneously.