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Thread: What Is ‘ACH’

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    What Is ‘ACH’

    An online merchant account is a business with an
    internet presence that accepts payments

    If any business has an online merchant account they
    will need to have a system in place that will process
    various credit or debit card payments as well as
    online bank transfers.

    This is a common account that accepts the payment from
    the customer and passes it on to the merchant’s bank
    account. This system is referred to as an "Automated
    Clearing House".

    An ACH is an institution that facilitates or assists
    in the transfer of funds from one financial
    institution to another. For instance, if you submit a
    check from another bank to your bank for payment, the
    check will go to the Clearing house in the area.

    This intermediary body will authorize the payment that
    will be transfered to your bank account. It cuts out
    the hassle of you having to go to the bank whose check
    you have to get your cash.

    Similarly, an ACH assists online merchant accounts to
    receive payments from any payment processing service
    such as VISA or MasterCard, even various online banks.

    An ACH acts as the link between his bank and the
    online merchant bank account, to facilitate the
    transfer of funds. Whenever a customer authorizes
    payment through an online process, such as a credit
    card or any electronic means, the ACH ensures that the
    payment is validated and that the merchant will
    receive his payment in due course.

    Many online merchants have chosen to use free online
    payment processors to cut on costs of setting up their
    own payment gateways. Though the process is free, the
    payment transactions still have to go through the ACH
    in order for the merchant to receive his payment.

    This is a very secure way of transacting online and is
    catching on very fast. In fact, accepting payments
    online is as easy as accepting cash over the counter,
    only this way the merchant does not have to go to the
    bank to deposit the money, the ACH does it for him.

    DotComBum a.k.a DCB

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    Will.Spencer (22 August, 2009)

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