The ACH is an electronic network for the processing of both debit and credit transactions within the United States and Canada. ACH payments include direct deposit payroll, Social Security payments, tax refunds, and the direct payment of business-to-business and consumer bills. Within the ACH system, the originator is the entity that originates transactions, and the receiver is the entity that has authorized an originator to initiate a debit or credit entry to a transaction account. The transactions pass through sending and receiving banks that are authorized to use the ACH system.
The transaction costs associated with ACH payments are low, typically about 10 percent of the fees charged for wire transfers.