What does ACH stand for?

ACH stands for Automated Clearing House. This term refers to a network that facilitates electronic payments and money transfers between financial institutions. The primary function of the ACH system is to enable the efficient and secure movement of funds through direct deposits, direct payments, and other electronic transactions.

Automated Clearing House is a critical component of the payments ecosystem, simplifying the process of processing large volumes of transactions, and it's widely used for payroll, bill payments, and other recurring payments. Understanding the role of the ACH system is essential for grasping how money flows within various financial transactions and the efficiency it brings to the payment process. This level of knowledge is crucial for anyone studying the principles of payments.