[WEBINAR] Bulletproof: How Today's Business Leaders Stay on Top

Automated Clearing House Network (ACH Network)

Definition - What does Automated Clearing House Network (ACH Network) mean?

An automated clearing house network (ACH network) is an electronic network for the automatic batch processing of financial transactions.

ACH networks simultaneously process very large numbers of credit and debit transactions. The primary purpose of ACH networks is for making electronic direct deposits or money transfers. They are considered the backbone of the electronic movement of finances and financial data.

An automated clearinghouse network may also be referred to as simply an automated clearing house.

Techopedia explains Automated Clearing House Network (ACH Network)

The ACH network is in place to automate the large-scale processing of automated payments. This has a number of functions, including:

  • Payroll deposits
  • Government-issued payments such as Social Security
  • Regular payment debits, such as payments for rent, loans, household bills, mortgages etc.
  • Business-to-business payments
  • E-commerce transactions
  • Federal, local, state tax, and other contributory payments
  • Internal transfers between banks

A survey released in 2011 by Ecom Advisors found that only 34 percent of businesses with between two and 100 employees used direct deposit. The study suggested that despite the widespread use of ACH networks there continues to be a market for small businesses, while medium and large businesses already use ACH networks to a much greater extent.

Share this:

Connect with us

Email Newsletter

Join thousands of others with our weekly newsletter

The 4th Era of IT Infrastructure: Superconverged Systems
The 4th Era of IT Infrastructure: Superconverged Systems:
Learn the benefits and limitations of the 3 generations of IT infrastructure – siloed, converged and hyperconverged – and discover how the 4th...
Approaches and Benefits of Network Virtualization
Approaches and Benefits of Network Virtualization:
Businesses today aspire to achieve a software-defined datacenter (SDDC) to enhance business agility and reduce operational complexity. However, the...
Free E-Book: Public Cloud Guide
Free E-Book: Public Cloud Guide:
This white paper is for leaders of Operations, Engineering, or Infrastructure teams who are creating or executing an IT roadmap.
Free Tool: Virtual Health Monitor
Free Tool: Virtual Health Monitor:
Virtual Health Monitor is a free virtualization monitoring and reporting tool for VMware, Hyper-V, RHEV, and XenServer environments.
Free 30 Day Trial – Turbonomic
Free 30 Day Trial – Turbonomic:
Turbonomic delivers an autonomic platform where virtual and cloud environments self-manage in real-time to assure application performance.