Automated Clearing House (ACH) is an electronic network for financial transactions in the United States. ... ACH credit transfers include direct deposit, payroll and vendor payments. ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills.

How does ACH payment processing work?

ACH transactions are processed in two ways, credits and debits. ... That entry is then sent to the consumer's bank—which then debits the account for the amount due—and sends a credit to the lender's bank account. The ACH credit process is most commonly used by employers to deposit payroll directly into a bank account.

Is there a difference between ACH and Direct Deposit?

The broad difference between Direct Deposits and ACH debits is that the former have funds being pushed into an account, while the latter have funds being pulled out of an account.