ACH Transactions
ACH (Automated Clearing House) Transactions are electronic funds transfers processed through the Automated Clearing House network in the United States, enabling batch processing of debit and credit transactions between bank accounts. They are commonly used for direct deposits, bill payments, business-to-business payments, and tax refunds, operating on a next-day settlement basis for standard transactions. This system provides a cost-effective and reliable alternative to paper checks and wire transfers for domestic payments.
Developers should learn about ACH Transactions when building financial applications, payment processing systems, or e-commerce platforms that require automated bank transfers in the US. It's essential for implementing features like payroll direct deposits, recurring subscription payments, or peer-to-peer payment services, as it offers lower fees compared to credit card networks and supports high-volume transactions. Understanding ACH is also crucial for compliance with financial regulations such as NACHA rules and for integrating with banking APIs or payment gateways.