The process works in reverse when you receive money, like with a direct deposit. The ACH clearinghouse then contacts the bank of your utility company to give notice of the transaction and your Automated Clearing House payment.
Your bank then submits your ACH transaction to a clearinghouse, a financial institution that processes these transactions. You’d enter the utility company’s banking information and how much you want to pay. First, you submit a request to your bank to electronically transfer money to your utility company. The transaction is processed through the ACH network instead a card network like Visa® or MasterCard.įor example, say you want to use ACH to pay your electric bill.
You can use the ACH system to make a direct payment, which is when you send money to another person or company, or to receive a direct deposit, where you get money from someone, like your employer.
