What is an ACH payment? How it works, types, and fees explained

Key takeaways

• An ACH payment is an electronic bank-to-bank transfer that runs through the Automated Clearing House (ACH) network. It comes in two forms: ACH debit (pulling funds) and ACH credit (pushing funds).

• ACH payments are mainly used for domestic US transactions, such as payroll, bill payments, and recurring invoices. However, International ACH Transactions (IATs) can also support cross-border payments.

• With Airwallex, you can open a USD account and send or receive ACH payments without needing a US entity. This can save time and cut transaction costs.

Automated Clearing House (ACH) payments are a reliable, low-cost way to transfer money electronically within the United States. If you’re paying monthly suppliers, running payroll, or collecting recurring payments from customers, ACH can be a faster and cheaper option than wire transfers and paper cheques.

In this guide, you’ll learn how ACH payments work, the main types, how ACH compares with other payment methods, and how you can start using it — even if your business isn’t based in the US.

What is an ACH payment?

An ACH payment is an electronic transfer of money between bank accounts that’s processed through the Automated Clearing House network. You can think of the ACH network like a postal sorting office for electronic payments. It groups transfers and routes them between banks, instead of sending each one on its own. This leads to lower fees and less manual work, especially for recurring payments like payroll and vendor invoices.

The ACH network is run under rules set by Nacha (the National Automated Clearing House Association). Nacha sets the standards and operating rules for all ACH transactions. In 2025, the network processed over 35 billion payments worth more than US$93 trillion, which makes it one of the largest payment systems in the world.

You may also hear ACH payments described as a type of electronic funds transfer (EFT). That’s correct. EFT is the umbrella term for any electronic movement of money, and ACH is one method within it. Other EFT types include wire transfers, card transactions, and real-time payments.

It’s also helpful to know the difference between "ACH transfers" and "ACH payments". ACH transfers is the wider term for the whole process of moving funds through the ACH network. ACH payments usually refers to the individual transactions, such as one bill payment or a direct deposit.

Types of ACH payments

There are two main types of ACH payments: debit and credit. Once you know the difference, it’s easier to pick the right option for each payment situation.

ACH debit

An ACH debit pulls money from the payer’s bank account. The payee (the business collecting the payment) starts the transaction by asking for funds from the payer’s account.

• Who initiates: The payee (your business, when collecting payments)

• Common use cases: Subscription services, recurring invoices, utility bills, membership fees

For example, if you run a subscription service, you’d use ACH debit to collect monthly payments from customers automatically on the agreed date.

ACH credit

An ACH credit pushes money from the payer’s account to the recipient’s account. Here, the payer starts the transaction, so they control when the payment is sent.

• Who initiates: The payer (your business, when making payments)

• Common use cases: Payroll, vendor payments, supplier invoices, tax refunds

For example, when running payroll, your business would start ACH credit payments to send salaries straight into employees’ bank accounts.

How ACH payments work

Instead of using paper cheques or card payments, businesses can use ACH transfers to move money more efficiently. Each transaction follows a set process through the ACH network:

• Authorisation: The payer gives permission for the transaction. With ACH debit, the payer authorises the payee to take funds. With ACH credit, the payer tells their bank to send funds.

• Batching and processing: The originating bank (called the ODFI, or Originating Depository Financial Institution) gathers the payment request and sends it to the ACH network. Payments are grouped into batch payments and processed at set times during the day.

• Settlement: The ACH network routes the payment to the receiving bank (the RDFI, or Receiving Depository Financial Institution). The receiving bank then credits or debits the right account, and the transaction is complete.

ACH debit vs. ACH credit process

The main difference is who starts the transaction:

• ACH debit: Started by the payee (your business, when collecting). You’re pulling funds from your customer’s account.

• ACH credit: Started by the payer (your business, when paying out). You’re pushing funds to the recipient’s account.

Both use the same network, but the direction — and who controls the timing — is different.

Same-day ACH

Standard ACH payments usually take one to two business days to settle. However, if you need the money to move faster, same-day ACH is available.

Nacha introduced same-day ACH in 2016. It lets transactions be processed and settled within the same business day. There’s an extra fee for this service. Under Nacha’s rules, it’s capped at US$0.05 per transaction, although your bank or payment provider may charge more.

Same-day ACH can help with urgent payments, such as last-minute payroll fixes, urgent vendor payments, or same-day bill payments. But for regular recurring payments where timing isn’t tight, standard ACH is often the more cost-effective option.

ACH payments vs. other payment methods

ACH isn’t the only way to move money electronically. Here’s how it compares with wire transfers, card payments, and other EFT methods.

ACH payment vs. wire transfer

The biggest differences between ACH payments and domestic wire transfers are speed, cost, and flexibility:

• Speed: ACH payments usually take one to two business days (or same-day with an extra fee). Domestic wire transfers can settle within hours, sometimes the same day.

• Cost: ACH payments cost about US$0.25 to US$2.00 per transaction. Domestic wire transfers usually cost US$25 to US$35, and international wire transfers can reach US$50 or more.

• Settlement and reversibility: ACH credit transactions can be reversed within five business days. ACH debit can be returned for reasons such as insufficient funds for up to two days. Wire transfers are usually final once they’ve cleared.

ACH payment vs. card payments

ACH and card payments can both be useful, but they often fit different needs. The right choice depends on what you’re paying for and who you’re paying:

• Cost: ACH fees are usually US$0.25 to US$2.00 per transaction. Card processing fees are often 2–3% of the transaction value, which can add up fast on larger payments.

• Success rates: ACH often has higher success rates for recurring payments because it’s less likely to fail due to expired cards or changed card numbers.

• Speed: Card payments can settle faster (often within one to two business days), while standard ACH takes one to two business days.

• Consumer preference: Cards are accepted more widely for consumer purchases, while ACH is more common for B2B payments and recurring billing.

For recurring B2B payments or high-value transfers, ACH’s lower fees often make it the better-value option. For consumer payments where speed and convenience matter, cards may be a better fit.

ACH vs. EFT: What's the difference?

EFT (electronic funds transfer) is the broad term for any electronic movement of money between accounts. ACH is one type of EFT, but it isn’t the only one.

Other EFTs include:

• Wire transfers: Real-time, high-value transfers that are processed one by one

• Card transactions: Debit and credit card payments processed through card networks

• Real-time payments (RTP): Instant payment systems that settle within seconds

So, if someone asks, "Is ACH the same as EFT?", the answer is no. ACH is a specific type of EFT, and EFT covers many electronic payment methods.

Benefits of ACH payments

Using ACH payments for domestic US transactions can bring several benefits for businesses that handle regular payments.

Lower transaction costs

ACH payments are much cheaper than many alternatives. At US$0.25 to US$2.00 per transaction, they cost far less than domestic wire transfers (US$25–US$35) and help you avoid the 2–3% processing fees charged on card payments.

For businesses that pay often — such as weekly payroll or monthly vendor invoices — those savings can stack up quickly. For example, a company making 100 vendor payments each month could save over US$2,000 per month by switching from wire transfers to ACH.

Automation and convenience

You can schedule ACH payments ahead of time for recurring transactions. That means your finance team doesn’t need to start each transfer by hand. Set up payroll once, and salaries are sent automatically each pay cycle.

This also cuts admin work and lowers the chance of mistakes that can come with manual payment processing. On top of that, it helps payments arrive on time, which can strengthen relationships with employees and suppliers.

Security and reliability

ACH payments run through a regulated network that follows Nacha’s operating rules. This includes fraud safeguards and standard steps for dealing with unauthorised transactions.

If something goes wrong, ACH has set return codes and dispute steps. ACH debit payments can be returned for reasons like insufficient funds or unauthorised withdrawals, within certain time windows. That gives both payers and payees added protection, which can be harder to get with other payment methods.

Is ACH available outside the US?

The ACH network is a US domestic system, so it’s mainly built for payments within the United States. Still, international businesses can often access it too.

International ACH Transactions (IATs) allow payments to move from US-based accounts to overseas accounts, often at a lower cost than standard international wire transfers. Also, fintech platforms like Airwallex let non-US businesses open USD accounts and use the ACH network without needing a physical US entity.

If you’re based in the UK, you’ll know similar systems. Bacs manages batch payments (such as payroll and direct debits), while Faster Payments offers near-instant transfers. These do a similar job to ACH, but they run on different networks.

Send and receive ACH payments with Airwallex

If you’re based outside the US but need to send or collect USD, you’ve probably seen how hard it can be to access US payment networks. A traditional US bank account often needs a US entity, which can add time, effort, and cost.

Airwallex offers a simpler option. With our Global Accounts, you can open a USD account and pay or get paid like a local — without registering a US business.

Here’s how to get started:

• Open a USD account: Sign up for an Airwallex Business Account and open a USD Global Account. You’ll get US account details, including an ACH routing number, which you can use to send and receive ACH payments.

• Share your account details: Give your account number and ACH routing number to payers. You can also use Airwallex Payment Links or connect to eCommerce platforms like Shopify to collect ACH payments from customers.

• Set up payment schedules: For recurring payments, agree clear schedules with your customers or vendors. This helps reduce disputes and supports on-time transfers.

In addition to ACH, Airwallex lets you open multiple Global Accounts in different currencies. This can help you avoid high international transaction fees and reduce the need for complex currency conversion. It’s a simpler way to manage global payments from one platform.

Open a free Airwallex account and start sending and receiving ACH payments today.

Frequently asked questions (FAQs)

How long does an ACH payment take?

An ACH payment usually takes one to two business days to process. If you need faster settlement, same-day ACH is available for an extra fee, and it lets payments clear within the same business day. The exact timing depends on when you start the payment and on your bank’s processing times.

How much do ACH payments cost?

ACH payments usually cost between US$0.25 and US$2.00 per transaction for domestic transfers. That’s much cheaper than domestic wire transfers (US$25–US$35) or international wires (up to US$50). Fees vary by provider, so check with your bank or payment platform for the exact price.

Is ACH the same as a wire transfer?

No, ACH payments and wire transfers aren’t the same. ACH payments are batched and processed through the Automated Clearing House network, which makes them cheaper but slower (one to two business days). Wire transfers are processed one by one and usually settle faster (often the same day), but they cost much more. For a full comparison, see the ACH vs. wire transfer section above.

What is the UK equivalent of ACH?

The UK doesn’t use the ACH network. Instead, it has its own systems: Bacs for batch payments (like payroll and direct debits) and Faster Payments for near-instant transfers. If you’re a UK business and you need to send or receive ACH payments in USD, Airwallex can help. Our Global Accounts let you access the US ACH network without needing a US entity.