difference between ach credit and ach debit

Social Security benefits are paid through ACH. Recurring bill payment systems, like those used by utility companies and subscription services, run on a program called Direct Payment via ACH. More than 90 percent of American workers receive their pay through direct deposit, a program that runs on the ACH Network. The ACH Network processes many other types of EFTs in addition to e-checks. Now that we have our definitions in place, the relationship between e-checks and the ACH Network is a bit clearer: An e-check is a type of EFT that is processed through the ACH Network. Using the same square/rectangle relationship, all online payments are EFTs, but not all EFTs are online payments. The term “EFT” includes any request to credit or debit a consumer’s bank account originating from a telecommunications platform, whether that’s the internet, an ATM machine, or even a phone call. EFT stands for “electronic funds transfer.” We include this definition here because an e-check is one type of EFT.You can find out more about e-checks and how they work on our blog. The key financial identifiers supplied by checks, both online and off, are the amount of the payment, the bank routing number, and the account holder’s bank account number. Like their paper counterparts, e-checks enable the transfer of funds directly from a payer’s checking account to the receiver’s bank account. E-checks are the digital equivalents of traditional paper checks (the “e-” is short for “electronic”).Read our blog post to learn more about how payments move through the ACH Network.

The ACH Network transfers funds from one bank account to another through a centralized system. ACH stands for the Automated Clearing House, an electronic payment network that dates back to the early 1970s.At this point, a few definitions are in order. So while all e-checks are ACH payments, not all ACH payments are e-checks. E-checks and ACH payments have a similar relationship.Īn e-check is a type of ACH payment - but not the only type. Geometry teachers will point out that while all squares are rectangles, not all rectangles are squares.

Difference between ach credit and ach debit