What ACH is
ACH, the Automated Clearing House network, moves money between bank accounts across the United States: payroll direct deposits, benefit payments, bill payments and business payouts all run on it. Nacha writes its rules, the Nacha Operating Rules, while two operators process the payments: the Federal Reserve Banks, through FedACH, and The Clearing House, through its Electronic Payments Network.
ACH works in batches on banking days. Most payments settle within one banking day, and Same Day ACH settles them on the day they are sent. It reaches nearly every bank and credit union account in the US, which is why it is the dollar rail our accounts and payouts modules connect to.
What it does in your platform
Accounts & IBANs
Where your partner bank issues US account and routing numbers, customers receive direct deposits and transfers over ACH, and move money between their account in your app and their own accounts at other US banks.
Payouts
Pays out dollars to US bank accounts, as standard or Same Day ACH. Each return comes back with an R code that says why, and the module matches it to the payout it belongs to.
How the connection works
ACH entries are sent by a US bank, the originating depository financial institution or ODFI, directly or through your banking partner. The module sends payouts through the partner's API, and the partner's webhooks report settlement and returns.
A payout is due
A contractor in the US is owed dollars. The module screens the payout and holds the amount in the ledger.
An entry is built
The payout becomes an ACH credit to the contractor's routing and account number, typed PPD for a consumer account or CCD for a business one.
The bank sends it
Your partner's bank, the ODFI, sends it in a batch to an ACH operator, which passes it to the contractor's bank, the RDFI.
It settles
Sent as Same Day ACH, it settles that banking day; a standard credit settles within one or two banking days. The partner's update closes the payout in the ledger.
Or it is returned
If the account is closed or cannot be found, the RDFI returns the entry with an R code: R02 for a closed account, R03 when no account is found. The module matches the return to the payout, reverses it in the ledger and shows the reason in the backoffice.
Next to other rails
ACH carries dollars inside the US. For dollars sent abroad the Payouts module uses SWIFT or a payout network, and other currencies go over their own local rails.
Whichever US bank or partner originates your entries, the module talks to it through one interface. Changing it later changes a connector, not your app, and past payouts and returns stay in the ledger.
When ACH fits best
A strong fit when
- You pay contractors, sellers or customers who bank in the US.
- Your payouts can settle on banking days rather than in seconds.
- You want every return to come with a standard reason code your team can act on.
Also worth a look
- A card payout when a US recipient needs the money at once.
- SWIFT for dollars sent to banks outside the US.
How we get you live
The bank
We help you get ACH origination in place through a US bank, or a partner that works with one, for the entry types you need.
The entries
We set up the entry types, same-day or standard settlement, and the limits and approvals for your payouts with you.
The keys
The partner's API keys and webhook secrets go into your platform's secrets and nowhere else.
A full test run
Payouts and returns are tested in the partner's sandbox where it has one, then a first live entry is followed into the ledger.
