ACH Transfers: Basic Questions & Answers (Legal Guide)

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1. What is ACH?

ACH (Automated Clearing House) is a network that processes electronic financial transactions between banks in the U.S. Common ACH uses include direct deposit payroll, bill payments, and business-to-business transfers.

2. What’s the difference between ACH credit and ACH debit?

  • ACH Credit: The sender initiates the payment to a recipient’s account (e.g., employer sends payroll).

  • ACH Debit: The recipient pulls funds from the sender’s account with authorization (e.g., automatic bill payments or subscriptions).

3. How long do ACH transfers take?

Most standard ACH transfers post within 1–3 business days. Same-day ACH services exist but may incur fees and require same-day processing windows.

4. What are ACH limits?

ACH limits vary by bank, account type, and whether it’s same-day ACH. Some consumer accounts have per-transaction or daily limits; business accounts typically have higher thresholds. Consult your bank for exact limits.

5. Do I need email or online access to set up ACH?

To set up a legitimate ACH transfer you typically need the routing and account numbers, and the recipient’s authorization. Banks often require the customer to authenticate the request via online banking, phone verification, or signed authorization forms.

6. How can businesses accept ACH payments?

Businesses can accept ACH via their bank, payment processors, or an ACH gateway (e.g., Plaid, Stripe ACH, NACHA-compliant processors). They should implement authorization agreements and reconciliation processes.

7. What security best practices apply to ACH?

  • Use multi-factor authentication (MFA) for online banking.

  • Monitor account activity and reconcile transactions daily.

  • Use positive pay and ACH blocks/filters at the bank to prevent unauthorized debits.

  • Only share routing/account numbers with trusted parties and use secure channels.

8. What to do if you suspect unauthorized ACH activity?

  • Contact your bank immediately and freeze the account if needed.

  • File an unauthorized transaction claim and follow the bank’s dispute process.

  • Report fraud to the FTC (IdentityTheft.gov) and law enforcement when applicable.

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