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Version: v2

ACH

Overview​

ACH (Automated Clearing House) is an electronic network for financial transactions in the United States. ACH payments are electronic payments made through the Automated Clearing House network, which processes large volumes of credit and debit transactions in batches.

How ACH Payments Work​

ACH Payment Process
  1. Initiation: The customer provides bank account details and authorization
  2. Processing: The payment is submitted to the ACH network
  3. Settlement: Funds are transferred between financial institutions
  4. Posting: The transaction is completed and recorded in both accounts

ACH payments typically take 1-3 business days to process and settle.

Types of ACH Transactions​

  • Direct Deposit: Payroll, tax refunds, and other deposits
  • Direct Payment: Bill payments, subscription payments, and one-time purchases
  • B2B Payments: Business-to-business transactions
  • P2P Transfers: Person-to-person money transfers

Benefits of ACH Payments​

BenefitDescription
Cost-EffectiveLower processing fees compared to credit cards (typically $0.20-$1.50 per transaction)
ReliableEstablished, secure network with strong regulatory oversight
ConvenientEnables recurring payments and automated transactions
Eco-FriendlyReduces paper usage compared to checks

Key Considerations​

  • Return Rates: Managing ACH returns (NSF, invalid account, etc.)
  • Risk Management: Fraud prevention and transaction monitoring
  • Timing: Understanding settlement timeframes
  • Compliance: Following NACHA rules and regulations
  • Customer Experience: Proper communication about timing and authorization

ACH in Convenient Checkout​

The Convenient Checkout platform supports ACH payments with the following features:

  • Multiple Entry Methods: Support for bank account details entry via:

    • Direct input of routing and account numbers
    • Stored payment methods (wallet)
    • IVR (Interactive Voice Response) systems

  • Consent Management: Robust framework for capturing and storing customer consent

    • Web-based consent collection
    • Telephonic consent collection
    • Paper-based consent handling

  • Payment Flows:

    • One-time payments
    • Pay and Store
    • Payment with stored bank accounts

Security and Compliance​

Security Requirements

ACH payments require strict security measures:

  • Data Encryption: All bank account information must be encrypted at rest and in transit
  • PCI Compliance: While not credit card data, bank information requires similar protection
  • Access Controls: Strict limitations on who can view full account details
  • Data Retention: Policies for secure storage and deletion of sensitive data
NACHA Compliance

All ACH transactions must comply with NACHA (National Automated Clearing House Association) rules:

  • Authorization: Proper customer consent must be obtained and documented
  • Authentication: Identity verification of the account holder
  • Format Requirements: Transactions must adhere to NACHA file specifications
  • Return Thresholds: Merchants must maintain acceptable return rates
  • Record Retention: Authorization records must be kept for at least 2 years