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Payment Rail Systems

Basics of ACH Payments in America

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The Automated Clearing House (ACH) network is a crucial component of the United States' payment rail system. Serving as an electronic fund-transfer system, ACH facilitates the movement of money between banks across the country. This article provides an overview of how ACH operates, its role in simplifying transactions like direct deposits and bill payments, and its significance in the broader context of US financial operations.


The Automated Clearing House (ACH) network, integral to the U.S. payment system, has its roots in the late 1960s and early 1970s. It was developed as a response to the growing volume of checks, aiming to improve the efficiency and reliability of the financial system. Initially, ACH was used for processing large volumes of relatively small-dollar, recurring transactions like payroll. Over the years, ACH has evolved significantly, embracing technological advancements to become a faster, more secure, and versatile method for electronic fund transfers. Today, it handles a vast array of transactions, becoming a backbone of the American banking system.

Limitations and Benefits of ACH Transactions

While the system offers numerous positives, it's also essential to consider its limitations. Let's examine both the advantages and the drawbacks to get a balanced view of the system's capabilities.

What are the associated costs?

Typically, banks charge a nominal fee per ACH transaction, which can range from a few cents to a few dollars, depending on the bank's pricing policy and the customer's account type. For businesses conducting large volumes of transactions, these fees can be even lower due to bulk processing. However, there might be additional fees for expedited or same-day ACH transfers. The timelines for Automated Clearing House (ACH) payments in the United States typically vary based on the type of transaction. It's also important to note that transactions initiated late in the day, on weekends, or on holidays might only be processed on the next business day.


Are you operating a global business and looking to handle ACH transactions as seamlessly as a US-based company? Whether it's paying suppliers in USD or receiving payments from US customers, Finofo is your solution. By signing up with Finofo, you gain access to US accounts without the need for a physical business entity in the States. This setup allows you to operate like a local entity, managing your finances with the same ease as any US-based business. With Finofo, you're empowered to send, receive, hold, and convert money globally, maintaining the operational efficiency of a local company.

Karthikeyan Sundaram