Everything You Wanted to Know About ACH Payments| North Loop Official Blog
North Loop Logo
North Loop
12 Jan 2020

Everything You Wanted to Know About ACH Payments

thumbnail for Everything You Wanted to Know About ACH Payments
Credit: North Loop

What is ACH?

Every country has its own in-country system for doing bank to bank transfers. In the US, this is commonly known as ACH transfers - funds that move through the Automated Clearing House (ACH) Network. ACH transfers are a low-cost and efficient way to do bank transfers, and are preferred by many service providers to credit/debit cards as they are significantly cheaper.

Common uses for ACH

ACH is used in many scenarios, and you have most likely used it without even realizing. Some common uses for ACH include:
  • Employers depositing salaries into employee accounts (direct deposit)
  • Customers paying service providers
  • Businesses paying each other
  • Sending local bank to bank transfers

ACH Pulls - one of the most common use cases of ACH is when you pay a business. When you pay university fees or rent online, you usually login to an online portal and give your bank details. The business then direct debits this amount via ACH from your bank account. So whenever you’ve paid for some fees by providing your bank account information, the payment was processed via ACH!

How to send an ACH

When sending an ACH, you need the following information:
  • The name of the bank receiving funds
  • The type of account at that bank (checking or savings)
  • The bank’s ABA routing number
  • The recipient’s account number

Many banks will have different fees for same-day ACH or normal ACH. Same day ACH transfers, if done before a certain deadline, are processed and settled in the same day. Normal ACH transfers can take up to 3 business days to settle. Your North Loop account charges no fees for ACH, and does all ACH transfers as same-day for faster money transfers.

Why do businesses like ACH?

No more check handling - when customers pay via ACH, they eliminate the hassle of using paper checks. Businesses no longer need to wait for checks, process them, and don’t have to wait to find out that if a check bounced.
ACH is cheaper - receiving a payment via ACH is cheaper than receiving payments via debit or credit cards, which can go up to 3%. Of course, since its a transfer, it’s not real time and approval or denial responses aren’t instantaneous as they are with credit/debit cards.

How much does it cost to send an ACH?

An ACH transfer is paid for by the initiator - whoever requests or sends the funds must pay for it. Some banks can charge up to $2 for a same-day ACH transfer - but its free with your North Loop account. All ACH transfers initiated through a North Loop account are same-day and free for our users.

Save money with

No-fee banking, investments, remittances & insurance for the global Indian

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.