How To Send ACH Payments Securely

sending ach payments securely automated clearing house safe payment

Nowadays, there are tons of ways to give and receive digital payments. There are several apps, websites, and other ways to accept online payments from around the world.

The chain of sending ACH payments or wiring money online goes from the originator through the bank and then to the beneficiary. 

Sending ACH Payments

ACH Payments have been around since the 1970s and may seem like a dinosaur. However, there are more agencies, banks, and institutions that are sending and receiving funds through ACH than ever before.

The most recent numbers compiled to asses this reveal that the ACH network dealt with $23 billion payments adding up to $51 trillion dollars.

What is ACH?

ACH or Automated Clearing House is the main system agencies use to transfer funds electronically. Funds get deposited into financial institutions and payments are made through online transactions. 

How Do ACH Payments Work?

ACH payments go through the ACH Network. Funds go from one banking institution to another by way of a centralized system (ACH). The system then directs the funds to the intended person or business. 

These payments can be set up to reoccur and several employers use them to pay their employees. They offer benefits for both consumers and merchants. Bookkeeping with ACH payments is simple. You just use the feature "send check online".

Who Uses ACH?

As mentioned above a lot of people are using ACH all over the world. If you're an employer and pay workers through direct deposit, you probably use some form of ACH.

If you pay your monthly bills electronically with your checking or savings account, you use ACH. 

The Ins and Outs

If you dig a little deeper into what ACH is all about you will find that large numbers of transactions through ACH can be from several different sources that are batched together. They can be successive payments or just a one-time thing.

An ACH Direct Deposit is different from an ACH Payment. However, it does use the same kind of processing network. ACH Direct Deposits are for things such as tax refunds, interest payments, annuities, and of course payroll. 

ACH payments are categorized in two ways; ACH Credits and ACH Debits. ACH Credits send or push the funds from a customer's account to yours. 

ACH Debits withdraw or pull the funds from the customer's account and put them in yours. Pulls are usually made on mortgages, rent, gym memberships, car payments, utilities, and insurance premiums.


NACHA is a not-for-profit association that manages the administration, governance, and management of the ACH Network.

NACHA sets up the rules for ACH. However, the actual processing is overseen by The Clearing House Company and the Federal Reserve.

Credit unions, banks, merchant providers, and any other entity that participates has to adhere to the rules of NACHA.

Make Your ACH Transactions Secure

The best way to make your ACH transaction secure is to follow these four steps.

  • Set-up Merchant Specific Registration
  • Micro Deposits
  • Encryption & Tokenization
  • Secure Vault Payments

Look for merchants that have some or all of these features for sending ACH payments safely and securely. You should also avoid using public computers or public WiFi when completing any financial transactions to keep your information safe.

Transaction Approved

It seems almost impossible that something so modern has been around for such a long time. If you ask anyone on the street what is ACH exactly, they probably wouldn't have a clue.

As a society, we have only just begun to fully embrace the world of digital banking, investing, and electronic payments over the last decade or so. Without realizing it, we have been banking electronically by sending ACH payments for almost 50 years.

Looking for more financial information? Keep checking out our site. Visit the Frugal Finances and Tech sections of our financial blog for more information on fintech, payments, banking, and much more.

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