How Secure are ACH Payments?

To be reassured that ACH payments are secure, let’s first understand what they are. Automated Clearing House or ACH payments are payments made through a federally regulated electronic network used by financial institutions to send and receive financial transactions. An ACH processes large volumes of credit and debit transactions in batches, including direct deposits, payroll payments, insurance premiums, mortgage loans, and Point-of-Purchase (PoP) check conversion transactions. PoP transactions are specifically designed for originators, or banks, to convert a customer’s in-person check payment for purchases or services to an ACH debit.

The value of this is that ACH cuts transactions costs for merchants and customers, and some ACH transactions are even free of charge. Also, the ACH network is regulated by the National Automated Clearinghouse Association (NACHA) in conjunction with the Federal Reserve. NACHA rules aim to ensure efficient ACH payments, strengthen risk management, lessen returns and limit exceptions.

What security measures are in place?

Current legislation requires that users must register to become part of the ACH network. Also, they must provide details and take steps that are comparable to the requirements of the credit card payment industry. Supplying usernames, passwords, banking details and routing numbers are a prerequisite. Additional requirements include:

  • Merchant-specific registration: the ACH network does not allow any anonymous or indiscriminate transfers.
  • Data encryption: reputable payment providers include data encryption with their services. Data encryption converts sensitive data and information into code to prevent unauthorized transactions
  • Tokenization: reputable payment providers include tokenization with their services. Tokenization replaces sensitive financial data with unique identification symbols to prevent unauthorized transactions
  • Micro-validation: the payment processor adds micro-deposits into a user’s bank account for the user to verify exactly before any formal financial transactions can be made.
  • Secure vault payments: known as SVP, allows users to initiate ACH transactions without sharing sensitive financial data with recipients. All transactions are authorized directly through the user’s online bank account.

Of course, no payment technology is 100% risk-free, but there are additional steps that users can take to further secure their sensitive financial data and their payments.

Security is also about common sense

It’s no secret that with each security feature built into financial transaction processing, there are devious observers working on something to counter it, so customers must also take measures to protect themselves further.

Think before you pay! Support merchants that openly announce that they employ most if not all of the above security features. If a merchant doesn’t employ these features pay in cash or buy elsewhere; don’t place your sensitive financial data at risk.

Inform yourself! The NACHA regulations and best practices are freely available to everyone; familiarize yourself so that you know what to expect, what is acceptable and what is unacceptable.

Use your common sense! Avoid making financial transactions on public computers. Don’t click on unknown links when busy with financial transactions. And finally, never provide your username, password or anything similar to anyone for any reason, ever.

If you follow these guidelines, you will find that accepting ACH payments is not only convenient and cheaper, but secure as well. For more information about how secure ACH payments are or to sign up for a merchant account, please call (888) 924-2743 or go to


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