Automatic Clearing House
mechanism that operates through federal reserve: transfer from one thing to another
The Automatic Clearing House (ACH) is a nationwide electronic payment system that is used in the United States for processing financial transactions. ACH is used to move money between bank accounts, including direct deposit of payroll and Social Security benefits, bill payments, and e-commerce transactions. The system is governed by the National Automated Clearing House Association (NACHA).
ACH works by transferring funds between two banks using a batch processing system. This means that many transactions are grouped together and sent to the receiving bank at once, rather than individually. The system is designed to be secure and efficient, with strict encryption and authentication standards in place to protect sensitive financial information and prevent fraud.
In order to use ACH, a business or individual must have an account with a bank that is a member of the ACH network. They will then need to provide the necessary information for the transaction, including the recipient’s bank account number and routing number. The transaction will then be processed by the ACH network, with the funds usually arriving in the recipient’s account within one or two business days.
Overall, ACH provides a convenient and reliable way for businesses and individuals to move money electronically. It is widely used across a variety of sectors, and can be a cost-effective alternative to traditional payment methods such as paper checks or wire transfers.
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