ACH Payment Processing: A Complete Guide

Photo of author

( — January 10, 2023) — When it comes to online payments, there are various methods available to businesses, including credit cards, debit cards, and ACH payments. While credit and debit cards are well-known and easy to understand, ACH payments are still a mystery to much of the consumer and business world. In this complete guide to ACH payment processing, we will explore what it is, how it works, and how it compares with other payment types. We will also take a look at Veritrans, a leading merchant services provider, to understand the advantages of their services. 

Introduction to ACH Payment Processing

Automated Clearing House (ACH) payment is a type of electronic money transfer where funds are debited directly and electronically from one bank account and credited to another without the customer having to transfer or even know the recipient’s bank details. ACH payments can be used to transfer money from domestic or international sources, and the customer’s account and the bank’s security procedures are the only two items required – not credit card or debit card numbers.

The National Automated Clearing House Association (NACHA) is the governing body responsible for providing the rules and governing regulations for participating financial institutions in payment processing. NACHA stipulates the security and the requirements for financial institutions that are part of the ACH network and offers a dispute resolution mechanism in case of a payment discrepancy. 

What is ACH Payment Processing?

ACH payment processing is an electronic payment system used to perform automatic transfers of funds from one bank account to another. It is often used as an alternative to paper-based methods such as checks and money orders. Generally speaking, ACH payments are faster and easier to process than paper payments and can also be less costly. One of the most popular uses of ACH payments is the ability to set up recurring payments, such as monthly bills or salary payments. 

ACH payments utilize the existing ACH network, which is run by the National Automated Clearing House Association (NACHA). This network is made up of financial institutions that are responsible for handling and overseeing ACH payments. These financial institutions take care of approving and processing ACH payments as well as ensuring that the different parties involved in the transaction comply with NACHA regulations. 

Benefits of ACH over EFT

Let’s talk about ACH vs. EFT: When it comes to electronic payment processing, one of the primary benefits of ACH payments over Electronic Funds Transfer (EFT) payments is their speed. ACH payments are generally processed within 24 to 48 hours while EFT payments can take 2 to 3 days before they are processed. Additionally, ACH payments are generally secured using the same security protocol used by credit and debit cards, making them more secure than EFT payments. Finally, ACH payments are less expensive than EFT payments, with some financial institutions charging a fee of as little as 25 cents per transaction. 

The convenience of ACH payments is another benefit over EFT payments. 

  • Customers can easily set up recurring payments, so they don’t have to worry about manually entering their payment information every month. 
  • Additionally, there are many software platforms that can be used to automate the process further and reduce the amount of time and effort required. 
  • Finally, businesses and financial institutions can partner with merchant services providers, such as Veritrans, to further streamline the ACH payment process. 

How does ACH Payment Processing work?

The ACH payment process begins when the customer initiates a payment by providing their routing number and account number. This information is then transmitted to the merchant’s financial institution where it is verified and matched to the customer’s details on record. Once verified, the request is then forwarded to the Automated Clearing House (ACH) network where it is validated again. After validation, the request is routed to the financial institution where the merchant is located, and the funds are transferred. 

At each step of the process, the payment request is verified and validated to ensure that the payment process is secure and accurate. The completed transaction is then recorded by both banks, and the funds are credited to the merchant’s account. The entire process usually takes 1 to 2 business days although the exact time frame can vary depending on the financial institution. 

Merchant ACH Account Set-up and Requirements

For businesses to accept ACH payments, they must first set up a merchant ACH account. This account is akin to a business bank account, but it is specifically for payment processing. Generally, the process for setting up a merchant ACH account is the same as setting up a regular checking account: the owner of the business needs to provide personal and business information, fill out and submit the necessary paperwork, and wait for the account to be approved by the financial institution. 

In addition to a merchant ACH account, businesses may also need to enter into a service agreement with a payment processor. This agreement dictates the terms and conditions of the ACH payment processing services, including fees, policies, and procedures. Businesses may also need to utilize additional fraud prevention measures such as two-factor identification or tokenization. 

Different Types of ACH Payments

The ACH network supports two types of payments: direct deposits, and direct debits. 

  1. Direct deposits:  Direct deposits are payments made from one financial institution to another. Typically, this is used for the payment of employees’ salaries and other sources of income. 
  2. Direct debits: Direct debits are payments made from one account directly to another, such as when a customer pays for goods or services. This type of payment is often used for recurring bills, such as utility bills or monthly subscriptions, as it is easier and more convenient than other methods. 

What are Veritrans?

Veritrans is a merchant services provider specializing in ACH payments. The company was founded in 1987 and offers payment solutions to thousands of businesses around the world. Veritrans offers a range of services, including ACH payment processing, fraud protection, and customer service. The company is dedicated to providing businesses with a streamlined and secure ACH payment experience. 

Veritrans Merchant Services Overview

Veritrans offers a variety of ACH payment processing services for businesses, including the ability to accept payments from customers in different currencies and on different channels, such as point-of-sale and online. The company also offers fraud protection and strong customer support, allowing businesses to feel secure and supported. Additionally, Veritrans offers low processing fees and offers volume discounts for merchants processing large amounts of payments. 

Advantages of Veritrans Merchant Services 

Veritrans provides businesses with a comprehensive package of ACH payment processing services at an affordable price. The company’s low processing fees and volume discounts ensure that businesses can maximize their profits without incurring high costs. Additionally, Veritrans offers fraud protection and customer service, allowing businesses to feel secure and supported. Finally, the company’s services are easy to set up and use, allowing businesses to begin accepting ACH payments quickly and easily. We hope that this review of Veritrans merchant services helps you make an informed decision on whether Veritrans is the right fit for your business.


In conclusion, ACH payment processing is an efficient and cost-effective alternative to other payment processing methods. Through this comprehensive guide, we have explored in detail what ACH payment processing is, how it works, and the advantages it has over EFT payments. We have also looked at Veritrans, a leading merchant services provider, and discussed the advantages of their services. With this knowledge, businesses should be well-equipped to make an informed decision about ACH payment processing and begin accepting ACH payments.