Sending money online is becoming increasingly popular; it’s efficient, convenient, and often much cheaper than checks or credit cards. In this article, we’ll look at Zil Money – an online financial management tool for all your business and personal purposes, our platform provides an ACH transfer service that makes it easy to send and receive payments without any hassle. Keep reading to know more to Zil Money and payment by ACH that are secure, quick, and cost-effective.
Automated Clearing House (ACH) Definition
The Automated Clearing House (ACH) is a financial network in the United States that sends and receives money electronically. Online ACH payments are examples of electronic payments. They are used for bill payments and direct deposits. ACH is also used for a variety of commercial purposes.
The National Automated Clearing House Association, or NACHA, is in charge of the ACH network. This network lets banks move money quickly and safely from one account to another.
Types of ACH Money Transfers
Payment by ACH can be done in to 2 ways, but they differ in terms of cost and speed. These are their names:
- ACH Credits:
ACH credits must be authorized by both the payer and the recipient to be processed. The person making the payment and the person receiving the money must each sign off on the transaction before it can go through.
When both sides of the authorization are complete, the entity initiating the ACH credit will instruct its bank to send the money to a specific account. The transaction can be done manually or as a recurring payment.
- ACH Debits:
An ACH debit is different from a credit card purchase. An ACH debit takes the money out of the account being paid. This means that the person receiving the money (the payee) initiates the payment.
An ACH debit is when the person supposed to get the money agrees to have the money taken out of their account. This is often used by companies when someone owes them money. Sometimes these companies will call this an “autopay” or “ACH” instead of an “ACH debit.”
Same Day ACH
In 2010, NACHA tried to get banks to offer services quickly. There was some pushback to this because the concept had taken so long to spread. NACHA introduced Same-Day ACH.
Following consideration of member feedback, NACHA has suggested new possibilities for Same-Day ACH reconciliation. As a result, the following is included in the proposal:
- Electronic transactions, such as debit and credit cards, are settled three times daily: in the morning, midday, and end.
- If your home sale is international or exceeds $25,000, same-day settlement is not an option.
- All receiving institutions (banks, for example) must update their systems.
- Based on the inverse relationship between the two numbers, the originating institution (ODFI) will be charged a predicted fee for these updates, decreasing as the number of transactions grows.
NACHA Membership
ACH transactions are electronic payments made directly from your checking or savings account. Without paper checks, credit card networks, wire transfers, or cash, funds can be transferred between bank accounts. ACH transfers are fund transfers from one bank to another. The National Automated Clearing House Association runs a secure system that makes this possible. NACHA runs and protects these systems.
ACH security
NACHA wants businesses that start ACH transactions and third-party processors to follow protocols, processes, and controls to keep sensitive information safe. Their rules also say that banking information, like account and routing numbers, must be sent using safe technology.
If you are using an unsecured email or a web server that is not secured correctly, you cannot receive or transmit bank data. Ensure your ACH payment processor has implemented strong encryption methods and state-of-the-art procedures.
Zil Money provides a state-of-the-art security measure for saving your personal and financial data.
What Is Required for an ACH Transfer?
If you have the necessary information, making an ACH money transfer is simple. To make an ACH money transfer, you must provide the following information:
- Name.
- Routing/ABA number.
- Account number.
- Bank account type (business or personal).
- Transaction amount.
Advantages of ACH Transactions
- Convenience.
- Easier recurring billing.
- Preferred funding compared to checks.
- Fewer disputes.
- More secure.
- Environmentally friendly.
Disadvantages
- Slow process.
- Limitation on the transfer amount.
- Cutoff times.
- Lack of International payments.
Start using Zil Money today and use features like wire and ACH transfers, among many others, to see how quickly your company’s finances will get better. We also offer Zil, an online bank with the best ACH payment systems that lets you print checks or send money to other people. You can use our platform to pay bills, run payroll, and do many other useful things. Payment by ACH is simple thanks to our platform Zil Money.
