This digital era has made it so we can purchase various goods and services without having to leave our houses and driving to physical stores. From buying food and shopping for clothes to paying for utility bills and sending money to family abroad, it has made a lot of things so much easier, faster, and more convenient for everyone.
Because more and more people these days are choosing to transact online, ACH transfers are a payment method that many businesses offer to consumers. What is it and how does it work? Where is it used and what makes it a better choice than the other payment options?
What are ACH transfers?
ACH transfers are a type of payment that moves through the US-based financial network system known as the Automated Clearing House or ACH. These payments go from an originator bank account to a receiver bank account electronically and digitally, and offer many benefits that both the merchants and the consumers can enjoy.
What are examples of ACH transfers?
ACH transfers are used in many common transactions that many people have most likely already done hundreds of times without realizing. Below are some examples:

- Paying your taxes to the IRS using the online payment option
- Paying your employees by depositing money directly into their bank accounts
- Paying your suppliers for items you purchase from them
- Sending money from your bank account to another bank account
- Paying your electric, water, or internet provider through automatic bank payments
What do you need to make an ACH transfer?
In order for an ACH payment gateway to process an ACH transfer, there are some important pieces of information that need to be provided. For example, if you are a business owner, you can send your employees their pay by having the following information:
- The name of the receiving bank
- The account number of the recipient
- The type of bank account that the recipient has (savings or checking)
- The routing number of the receiving bank
You should ask your employees for these details so that the transfer can be processed by an ACH payment gateway without any problems.
What are the advantages of ACH transfers?
ACH transfers are a preferred payment method by many because they come with several advantages, such as:
They offer convenience. – ACH transfers do not require pens, paper, or fuel to move funds from one bank account to another through an ACH merchant payment gateway. They are electronic, so everything can be done digitally.
They are easy to keep track of. – For every ACH transfer you make, your bank automatically creates and keeps an electronic record of it. So if you need documentation for accounting, personal funds management, or other purposes, you can just check your online banking page for your transaction history. They cost less. – Sending money through an ACH merchant payment gateway does not cost as much as paying via credit cards. Especially if you are making recurring payments, you can save a lot by using ACH.