How to Accept ACH Payments Online the Easy Way in 2022

Our expert explains how your business can accept ACH payments online in a few simple steps. It's quick and easy to do if you set it up the right way.

As an eCommerce business owner, understanding the benefits of different online payment options can be confusing. You want to give your customer the best purchasing experience, but you also want to get paid without too much of a headache. Therefore, it is advisable to research the different payment options available to you before making an informed decision as to which types of online payment methods you will offer. 

One option you are likely to encounter is ACH payments. This article will explain what an ACH transaction is, the different payment methods, and delineate the benefits of using and accepting ACH payments online, both to you and your customer. 

What is ACH Payment?

Before you can decide whether to offer ACH payments online as a payment method on your site, you may be wondering what ACH payments actually are and what is an ACH transaction.

The ACH payment service offers direct electronic bank-to-bank transfers eliminating the need for a customer to share card details or physically hand over a check. It is a more secure and straightforward solution for taking payments from buyers than traditional credit cards and can also be used for paying employees. It is important to note, however, that ACH payment options are only available in the USA.

How do Online ACH Payments Work?

Automatic Clearing House, or ACH for short, is a system for the batch transferring of funds (electronically) from one bank to another. Each transaction has an “originator” who starts the transaction and a “receiver” who accepts the funds. Correspondingly the ‘starting’ bank is called the Originating Depository Financial Institution (ODFI), and the ‘receiving’ bank is the Receiving Depository Financial Institution (RDFI). Don’t be confused by this jargon, though, the receiver’s account can be debited or credited depending on whether they, for example, made a purchase or requested a refund. 

The actual technicalities behind an ACH transaction is somewhat complex, but all that is important for you - as a merchant offering this type of payment method - to know is that your customer will be asked to enter bank details and then the funds will be drawn directly from their bank and deposited into yours.  

Types of ACH Payments

There are two main ways in which ACH online transfers can be instigated: debit (also called “pull” transactions) and credit (also called “push” transactions). The payer (the customer) ultimately initiates both payment types; however, one requires a one-time mandate or authorization to be put in place while the other is an active payment.  

Debit (Pull Transactions)

An ACH debit payment means the seller pulls the funds out of the customer’s account and into their own. The customer has to provide an authorization allowing the seller to take a particular amount of money from their account on a one-time or recurring basis. For example, when Tom subscribes to a monthly magazine, he gives the magazine seller the right to pull a monthly subscription fee from his account without asking permission for every payment. 

Credit (Push Transactions)

An ACH credit payment is a one-time payment where the payer or customer needs to take action to push funds from their account into the payees’. For example, Tom buys a lovely pair of sneakers online, he ‘pushes’ the payment for his new shoes into the merchant’s bank account.

How Can You Use ACH Payments for Your Business?

Before deciding if you should add ACH online payments to your website, you may want to know what you could use it for. Here are four of the ways you might use ACH payment processing in your business: 

  1. Receiving customer payments: Online ACH payments do not require customers to enter their card details or deal with checks. As a result, the process of authorizing the transaction is smoother and more secure, providing the customer with a faster and more relaxed payment experience. 
  2. Paying suppliers: Some suppliers will only accept electronic payments, and using ACH payments is an excellent way of doing this. As a small business, it is crucial to minimize the risk of fraud, and ACH payment processing is a very secure online option that eliminates the need to deal with physical checks. 
  3. Paying taxes: As much as this may not be your favorite financial transaction, it is necessary. Paying taxes to the IRS can be simplified by using corresponding tax forms to withdraw funds directly from your business bank account when appropriate. 
  4. Paying employees: It is simple to set up payments to your employees using their bank routing number, account number, and the necessary authorizations from your side. 

What are the Benefits of Accepting ACH Payments?

As a small business owner, it is vital to be aware of the benefits of each system and practice employed in running your company. Here are the main advantages of using ACH payment services:

  1. Eliminating card fees: By taking out the middleman and removing the need for a card provider to get involved, you are also removing the fee associated with a card payment. This fee may be insignificant on a one-off payment, but the transaction fees saved can be substantial over time over multiple charges. 
  2. Greater control: ACH Debits or Pull payments (as explained above) allow you as a business to decide the date and frequency that you wish to draw funds for payment, leaving you in a better and more secure financial situation and avoiding the need to chase down late payments. 
  3. Low payment failure rate: Unlike cards and checks, which have a sneaky habit of expiring and getting lost, bank accounts are more long-term. Online ACH payments transfer directly from one account to another, negating the need to worry about expiring cards or bouncing checks. This means charges are less likely to fail, making you more likely to receive your money smoothly!
  4. Security: While checks can be lost or stolen and card transactions easily reversed by the customer, money coming in through an ACH payment is much more likely to get to you and stay with you. It is possible for a customer to cancel an ACH transaction, but it is much more difficult than canceling a credit card payment and therefore less likely that a customer would do so fraudulently. 
  5. Creates a syncable electronic record: Time is money, and with ACH online payments, you do not have to worry about spending time logging your income because the system does it for you.

How long does an ACH payment take to process?

ACH transactions may take up to 3-5 working days to appear in your bank account, but they can also be quicker. Payments made towards the beginning of the day and earlier in the week tend to transfer more quickly.

What Online Stores Accept ACH payments?

If you decide to accept ACH payments online, you will be in good company. Major retailers like Amazon, Walmart, and QVC also offer an ACH payment option. 


Do banks accept ACH payments?

Yes, nearly every major bank in the USA accepts ACH payments. Because ACH payments are essentially a direct transfer from one bank account to another, it is a convenient way to make payments. Different banks have different policies in terms of fees or how long it takes for an ACH transfer to go through.

What if an ACH transfer fails?

The chances of an ACH transfer failing is much lower than that of an online card payment; however, if a payment were to fail, most ACH service providers would do their best to resolve the issue. An ACH transfer may fail if the payee does not have sufficient funds in their account. The transfer may also fail if the payee decides to revoke or cancel the transfer before it is complete.

Why should I accept ACH payments in my online store?

It’s up to you as the merchant to decide what types of payment methods you want to accept. The majority of online shoppers will want to pay with a credit card or other mobile payment solution. But, there may be some people who do not have a credit card and who prefer to use direct bank transfer when shopping online. Those are the customers who will appreciate having the option to pay via ACH transfer. It’s also a good option if you offer subscription services or need to receive payment on a monthly or regular basis - with ACH payments it is easy to set up the option to take the funds from the payee’s account at a regularly scheduled time.

Meet the author
Emily Kirschenbaum
Emily is a content writer with a special interest in fintech and business. She loves sharing her knowledge to help small businesses take their first steps towards success.

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