What is an ACH Transaction and What are the Benefits?

ACH or Automated Clearing House payments electronically process payments by automatically taking money out of a checking account to make a payment. It is an automatic transaction method as opposed to the payment approval processes of writing paper checks or using a debit or credit card.

In order to conduct an ACH transaction correctly, it is a good idea to understand what an ACH transaction is and what the benefits are. Not everyone will benefit from taking advantage of ACH transactions but many users cite the convenience and stress-free payment processing as a major benefit.

How an ACH transaction works

The first step to a successful ACH transaction is for the person or company that is paying to authorize the person or company that is receiving the payment. This is done in advance when dealing with automatic payments such as utility or subscription services.

Benefits of ACH transactions

There are many reasons to use ACH transactions, but these are the main ones.


If a customer has trouble remembering to make payments for monthly subscriptions or utilities, by using ACH transactions they don’t have to.

Automatic payments to billing services pulled directly from a bank account could be a huge help in staying on top of payments and not paying any late fees.

Automatic payments also mean there is no need to write checks, pay postage, or mail anything to anyone.


The answer to the question of what an ACH transaction is should also include what it’s not. Since it’s not a written check and the customer doesn’t have to mail it, neither party has to worry about check fraud or about payments getting lost in the mail.

Since an ACH transaction works through a bank, the payment information will show up on the customer’s bank statements. They can track bills this way to stay confident that the money is going to the right place and that there are no surprises.

Those who want to stay environmentally friendly should also be pleased about saving paper.


The convenience of using an ACH card can also have some disadvantages. Since the payments may be automatic, a customer may accidentally pay for services that they no longer want but forgot about. Of course, this can be an advantage from the point of view of the service provider!

The Takeaway

ACH transactions can expedite payments and make them more convenient for both parties. People typically find the benefits of ACH transactions to far outweigh any potential problems.

Contact Charge.com by visiting the website or calling (888) 924-2743 to learn your options.

Leave a Comment