What does ACH stand for?

Gabriela Peratello

ACH stands for Automated Clearing House, and refers to payments processed electronically such as when you pay a utility bill or receive your salary as a direct deposit to your bank.

In 2021, more than 29 billion ACH payments were made, helping people through the US to send and receive money cheaply and conveniently. Read on for more about how ACH payments work, and when you may want to use one.


How does an ACH transaction work?

In the US, ACH payments are overseen by an organization called Nacha¹. While it’s theoretically possible to send an international ACH, this isn’t a widely available service, which means most of the billions of ACH transactions processed annually are sent to and from accounts here in the US.

In an ACH payment everything happens electronically². That means there’s generally no need to visit a bank, and no need to handle cash or write a check to pay or get paid — driving down costs and making the process fairly cheap and easy to use.

If you need to send an ACH payment yourself you’ll usually be able to do so through your bank or credit union’s online banking service — and if you need to receive an ACH all you need to do is give the sender your banking details and the money can be deposited to your account automatically.

Read all about making ACH payments in our full guide

What are the pros and cons of ACH payments?

✅ Pros❌ Cons
  • Widely available for USD payments

  • Suitable to both send and receive electronic transfers

  • Cheap and reliable

  • More secure and convenient than sending cash or a check

  • Not always the fastest way to move money

  • Often not available for international transfers

  • Some fees may apply, depending on your own bank’s policies

Need to make an international transfer but prefer to use ACH? Send money locally and get it where it needs to go with a quick Wise transfer

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  1. Nacha
  2. Nacha - What is ACH?

Sources checked on 01.06.2023

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