In the ACH debit transaction, it is the party who receives the amount who initiates the transaction. In the ACH credit process, it is the sender who initiates the transaction to the bank or the government agency. Read on to learn more about ACH payments and how they can help you send money easily. To understand this better, let’s take a deeper look at the workings of the ACH processes. Someone who uses mobile payment apps like PayPal or Venmo to send money to friends and family.

A person who receives a tax refund or interest payment straight into their bank account.

A customer who pays a bill via ACH payment instead of writing a check.

An employee who receives their bi-monthly paycheck via direct deposit from their employer.

Here are a few common examples of ACH payments: In other words, ACH payments facilitate the transfer of funds between bank accounts via a centralized clearing system. ACH credits are sometimes referred to as push transactions. For example, customers paying you would need to initiate an ACH credit after receiving an invoice for goods and services. As such, ACH credits are always initiated by the person paying you.

Here’s how ACH payments work: These electronic transactions allow business owners or their customers to debit funds directly from their respective bank accounts instead of processing a transaction via credit card, paper check, wire transfer, or cash. An ACH credit refers to money coming into your account. ACH, or Automated Clearing House, is a direct payment method that can electronically transfer money between banking networks in the United States.

Ach credit or ach debit paying taxes