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ACH payments are a convenient way for business owners, individuals, and employers to use intuitive automated banking throughout their daily lives. 

Most small business owners and employers are turning to ACH payments instead paper check payments because of the ease and instant access the ACH network provides. ACH transactions provide a quick and easy way to pay employees, submit and retrieve tax returns, and automatically control your finances within 1-2 business days. 

And the best part about ACH? Anyone can set them up and control them with a few clicks of a button. 


  • Nearly 93% of Americans receive payments through direct deposit; Automated Clearing House makes it simpler for employers to manage funds without handing out physical checks or dealing with pesky extra fees. 
  • Many small businesses choose ACH operators because they are more convenient than most direct deposits. ACH transfers don’t come with high fees and transactions and they’re easily edited if an employer wants to adjust payroll, extend bonuses, or reimburse an employee.
  • Whether or not you’ve heard of ACH payments before, you’ve likely benefited from them. Automated payments, utility bills, and direct deposits from small businesses are all examples of Automated Clearing House.
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Understanding ACH Deposits

Small business owners often opt for ACH payments to handle billing and tax refunds in order to streamline processes for transferring money, paying bills, and automatically organizing finances. 

Nearly 93% of Americans receive payments through direct deposit and ACH payments make it simpler for employers to manage funds without handing out physical checks or dealing with pesky extra fees. 

ACH payments usually consist of low-value payments and come in various forms, including:

  • Mortgage payments
  • Online bill payments 
  • Recurring payments, such as subscriptions
  • Direct deposits 
  • Money transfers 

The ACH network is consistently growing, as more businesses are moving toward recurring billing and direct deposits with their funds.

Currently, Automated Clearing House makes over 1 billion direct payments, including:

  • B2B and P2P payments
  • Charity donations 
  • Direct deposits
  • Tuition and debt payments
  • Social security  
  • Utility bills
  • Government benefits
  • Subscription services

Benefits of ACH Deposits

Many employers choose ACH payments because they are more convenient than most deposits and transactions. ACH transfers don’t come with high fees and transactions. They are also easily edited if an employer wants to adjust payroll, extend bonuses, or reimburse an employee.

When a business owner chooses ACH debit, they don’t have to fill out paperwork for every payment, change, or adjustment to their business. Instead, everything is a click away. Most ACH deposits are completed within 1-3 business days. Employers can also opt for same-day ACH transfers for the quickest bank-to-bank transactions.

While some direct deposit apps, such as Zelle, Venmo, and PayPal charge their users for same-day transactions and deposits, the Automated Clearing House eliminates the middleman and encourages ease in banking. 

That beingbenign said, ACH deposits are not completely free, though they are much more affordable than other wire transfers and credit card processing fees. The average ACH payment is about $0.29, while other direct deposits cost about $25 per payment.

ACH deposits create an easy banking experience for business owners and individuals.

How to Set Up an ACH Deposit 

Nearly any business owner can set up an ACH deposit. While it might take a few steps and require information from both the payer and the payee’s bank account, once an ACH deposit is created, business owners do not have to worry about recurring payments or processing their employer’s information every payday. 

The process of creating an ACH deposit account isn’t complicated. It can be broken up into four manageable steps. 

Step 1: Authorization

The employer or business setting up the ACH payment will need to gather the employee’s name, bank account number, routing or ABA number, account type, and transaction amount. While employers cannot batch ACH direct deposits, they can set up recurring payment methods within their Automated Clearing House.

Gathering all of this information sounds overwhelming, but your bank account will likely provide a form that you can send to your employees to receive most of that information. If you’re using ACH payments in a B2B context, you can send your business client a link to the form.

Step 2: Transaction initiation

Once your client fills out the form, they will either send it to the ACH provider or the ODFI, which stands for Originating Depository Financial Institution. This institution delivers the Automated Clearing House entries to the ACH operator. 

Step 3: Complete the payment request

The ODFI or ACH network will send a request from the business’ checking account to the individual’s account, also known as the RDFI, or Receiving Depository Financial institution. 

Step 4: Payment processing

Once the RDFI approves the fund’s amount, the direct payment will be processed. This entire process takes about 1-3 business days, as it involves multiple ACH networks.

After an ACH direct deposit is created, you might run into a few issues. While ACH payments are automated, they are not instant. ACH direct deposit usually takes 2-3 business days to clear, instead of automatically transferring in real time.

For this reason, it’s a good idea to send your payments out three days in advance, just in case. This means if you’re using ACH to pay your staff, send these payments out three days before payroll to ensure your employees get paid on time. 

Business owners can also opt for same-day or next-day ACH payments if they are concerned about their employees not getting paid on time. If neither of these options works for you, you can communicate with your employees that their payment will be a few days late, but we suggest problem-solving before opting for that. 

While ACH payments are convenient, they are not immune to fraud or errors. We suggest checking up on your information and ensuring payments go out on time, to avoid any concerned or upset employees. 

Differences Between ACH Payments and Other Payment Methods

Although ACH payments are quickly becoming the preferred payment option for businesses, it is not the only way small business owners can handle paydays. Here is a quick breakdown of other direct payment options, typical FAQs about Automated Clearing House, and the type of ACH transfer that is best for your small business or personal life.

ACH transactions versus wire transactions

Many business owners prefer to pay their employees through wire transactions because these transactions go directly from bank to bank instead of through third-party services. Wire transactions are also faster, usually taking minutes compared to the several business days 

However, wire transfers are not as versatile as ACH payments. Business owners can’t set up recurring or automated payments on wire transfers. If you’re looking for a solution to set up any small recurring payment, Automated Clearing House will create a streamlined option for your business.

ACH transfers versus credit and debit card transactions

ACH transfers are often a better choice than debit or credit card transactions. These transactions usuallyoften take out a higher percentage of every deposit and often add up over time. Not to mention, ACH transfers come in the form of debit and credit as well.

Pros of ACH Payments

There are several reasons why small business owners choose ACH payments over other payment methods. 

Consider the following.

ACH deposits and payments are simple to implement

The simplest reason is ease of use. Automated Clearing House accounts make direct payments easier and more accessible than ever.

If you’re a small business owner who is wearing many hats and juggling several forms of payments throughout the year, setting up ACH payments makes the process move smoothly. 

In general, if you’re paying people out of a business account, ACH payments take the pressure and complications out of the equation and allow you to run your business without interruptions or complications.

ACH payments are often a lower cost option

Another reason why business owners often prefer the Automated Clearing House network over other options is how inexpensive the payment processing experience is. Most businesses only have to pay a 1% transaction cost, and the cost caps itself at $10. 

When you use Stax, ACH transactions only cost $0.29 on average. For small business owners handling high-value transactions, or frequent complicated payments, setting up an ACH direct deposit is extremely beneficial to a long-term payment plan.  

Robust payment security

ACH transactions are also more secure than any other B2B payment method. Due to the automated and strictly bank-to-bank payment method that ACH payments require, they are often ranked as one of the most secure and fraud-proof forms of payment. The clearing houses Automated Clearing House pass through are under strict regulations. 

Cons of ACH Transfers

While some business owners might prefer to do their checking and banking ‘the old-fashioned way’ with paper checks and direct deposits, there aren’t many reasons why a business shouldn’t utilize ACH transactions. 

Not ideal if you’re transacting outside the ACH network

One of the only difficulties one might face when switching to ACH transactions would occur if your business is interacting with businesses outside the ACH network. And one could use that opportunity to help grow other’s business models and payment practices.
If you do hit this roadblock after moving your billing to an ACH network, there are several alternative payment methods you can still use that aren’t in the ACH network. 

Case Studies: ACH Payments in Action

Whether or not you’ve heard of ACH payments before, you’ve likely benefited from them. Automated payments, utility bills, and direct deposits from small businesses are all examples of Automated Clearing House. 

While both big and small businesses benefit from setting up ACH deposits, small business owners often opt for Automated Clearing House to handle small, but recurring payments for several reasons:

  • Automated Clearing House deposits are easy to manage, change, and create
  • ACH payments can easily be automatic and recurring
  • ACH credit and debit is less expensive than other payment options

ACH payments are not only for business owners. Individuals can benefit from the ease of use that comes with ACH payment networks.

Individuals can use ACH payment systems to automatically separate their funds for savings accounts and checking accounts. They can also use automatic electronic payments to pay bills, track tax refunds, create bank transfers with their roommates or significant others, and create an overall healthier relationship with money.

Final Words

No matter how you choose to use Automated Clearing House systems in your life, we suggest exploring all the benefits ACH transfers offer to individuals and businesses.

Are you planning to accept ACH payments in your business? Get in touch with Stax to speak with a payment expert who can help.

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FAQs about ACH deposit

Q: What is an ACH deposit?

An ACH deposit is an electronic payment made through the Automated Clearing House (ACH) network, a secure, efficient, nationwide mechanism that banks and financial institutions use to move money between accounts. This type of deposit allows for the direct transfer of funds from one bank account to another without the need for checks, wire transfers, or cash exchanges.

Q: What’s the difference between ACH and direct deposit?

The term “ACH” refers to the network and process used for electronic funds transfers, while “direct deposit” is a specific type of ACH transfer where funds are deposited directly into a recipient’s bank account from an organization or employer. Essentially, all direct deposits are ACH transactions, but not all ACH transactions are direct deposits. ACH can also include other types of electronic payments, such as bill payments and transfers between accounts.

Q: What’s the difference between a check and ACH?

A check is a physical document that authorizes the bank to pay a specific amount from the check writer’s account to the person or entity named on the check. Processing a check can take several days and requires manual handling. In contrast, an ACH transfer is an electronic transaction that moves funds directly between banks without the need for paper checks, usually completing within a day.

Q: What is an example of an ACH payment?

An example of an ACH payment is the direct deposit of an employee’s salary. In this scenario, an employer sends the payroll information to their bank, which then processes the payment through the ACH network.