What is ACH? What is Nacha?

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Stephanie Brenes, ACH & Compliance Lead


Friday, September 9, 2022

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Automated Clearing House (ACH) is a network that processes electronic financial transactions – such as direct deposits and direct payments – for consumers, businesses, and federal, state, and local governments. You can think of it as rails to make payments (Credit cards, for instance, use different rails.) If you signed up to get your paycheck directly deposited by your employer, you are getting a credit using the ACH rails. Some merchants or service providers may let you also make payments using ACH. Link Money makes these payments seamless and easy.

Now, what is Nacha’s role in ACH?

Nacha governs the ACH Network with the Nacha Operating Rules, keeping the network safe and efficient while also ensuring all participants in the ACH Network know their roles and responsibilities.

What’s new this year?

Nacha is constantly working on improving the ACH Network to meet the needs of its participants. As of March 18, 2022, Nacha has increased the limit for all same-day ACH credit and debit entries to $1,000,000. What does this tell you? The ACH Network is competing with other payment rails such as credit cards (at a fraction of the cost!) and its growth demonstrates that. In fact, in Q1 2022, the overall volume on the ACH Network totaled 7.3 billion payments, up 2.2% from a year earlier, and moved 18.5 trillion dollars (yes, that’s a trillion!), a 7.1% increase.

Why use ACH?

The benefit of ACH is that it allows businesses to accept payments while doing so in the most cost-effective way (without all those transaction fees!). ACH payments save you the hassle that comes with expired cards while still giving customers the flexibility of setting up a single one-time payment or recurring payment. Bank accounts are also less likely to change than cards meaning a significant reduction in churn.

You may be thinking, what if a customer does not have sufficient funds in their account? A benefit of card payments is that the card will decline if the customer does not have enough funds in their account to cover the payment. That’s where Link Money comes in with our Pay by Bank Cover! Link Money will guarantee you funds for some return codes, including the most common return code, R01 – Insufficient Funds. Connect with us to hear more about Link Money and how Link Money is able to guarantee certain return codes.

Want to get started?

Start the conversation about how Link Money can help your business. Have a particular question or want to schedule a call?