How to make an ACH payment in 5 simple steps

An ACH payment moves money electronically between bank accounts through the Automated Clearing House network, eliminating the need for paper checks or wire transfers. It's one of the cheapest ways to move money between US bank accounts, which is why businesses lean on it for payroll, vendor invoices, and recurring bills.

What is an ACH payment?

An ACH payment is an electronic bank transfer processed through the Automated Clearing House network, which allows money to move directly between bank accounts without paper checks or wire transfers. Businesses commonly use them for payroll, vendor invoices, tax payments, and recurring subscriptions.

If you've ever needed to pay a supplier or move funds without paying high wire transfer fees, ACH is often the simpler, cheaper option.

The scale is significant: The ACH network moved 35.2 billion payments worth $93 trillion in 2025.

One-time vs. recurring payments

A one-time ACH payment sends funds once with no standing permission to draw again, while a recurring ACH payment runs on a schedule under a single authorization. The right choice depends on whether the payment repeats.

Use a one-time payment for a single event, like paying a vendor invoice once. Use a recurring payment for predictable charges, like a monthly SaaS subscription set up with a standing authorization.

Recurring ACH debit always needs prior written or online authorization before the biller can pull funds, since you're granting permission for future withdrawals rather than approving each one.

What you need before making an ACH payment

Because ACH transactions move directly between bank accounts, entering incorrect banking details can lead to rejected payments or delays. Most banks and payment platforms verify account details before processing the transaction.

Preparing the right information ahead of time ensures that your ACH payment processes smoothly. It also helps you avoid common issues like insufficient funds or authorization errors.

Required recipient information

Before sending an ACH payment, you'll need basic banking information about the recipient:

• Recipient's full legal name or business name: Enter the recipient's full legal name or registered business name exactly as it appears on their bank account
• Bank account number: Provide the recipient's bank account number so the ACH network knows which account should receive the transferred funds
• Bank routing number: The routing number is a 9-digit code that identifies the recipient's financial institution and directs the ACH payment to the correct bank
• Account type: Select whether the funds should be deposited into a checking or savings account, since banks use this designation to route the transaction correctly
• Payment amount and purpose: Specify the exact amount you want to transfer and include a brief payment description, such as invoice number or service type, for recordkeeping

Sender requirements

You'll also need to meet several requirements on your end before initiating the transfer:

• Verified bank account with sufficient funds: Verify your bank account has enough available funds to cover the ACH payment and avoid rejected transactions
• Online banking access or payment platform account: You'll need access to your bank's online portal or a payment platform to initiate and manage the ACH transfer
• Authorization from account holder: If you're sending payments from a business account, make sure the account holder has authorized the ACH transaction
• Understanding of daily or monthly transaction limits: Review your bank's ACH transfer limits so you know whether your payment falls within the allowed daily or monthly thresholds

Most banks require account verification before allowing ACH transfers. This may involve confirming micro-deposits or linking accounts through secure banking authentication.

How to make an ACH payment in 5 steps

Once your account is set up, sending an ACH payment takes only a few minutes. The path is nearly identical whether you're in a bank portal, accounting software, or a payment platform. Follow these five steps in order.

1. Gather the recipient's bank details

Confirm the recipient's full name, routing number, account number, and account type before you start. Verify those details through a trusted channel, such as a phone call or a secure vendor portal, rather than relying on email alone, where fraudsters often plant fake banking instructions.

2. Log in to your bank or payment platform

Pick the channel that fits how you manage money:

• Bank online portal or mobile app: Best for one-off transfers and businesses that pay a handful of vendors directly
• Payment processor (such as Stripe or PayPal): Useful when you want built-in recurring payments and reconciliation
• Accounting-software integration: Best when you want payments to sync with your books, so automated bank reconciliation matches each payment to its invoice

3. Navigate to the transfer or ACH section

Find the menu labeled Transfer & Pay, Pay & Transfer, or Wires & ACH, depending on your bank. To pay someone new, select "add external account" or "new recipient" and enter their banking details.

4. Enter and review the payment details

Input the routing and account numbers, confirm the recipient's name and account type, then set the amount and a short description. Double-check the routing and account numbers here, since a single wrong digit is the most common cause of a rejected ACH payment.

5. Submit the payment and save your confirmation

Review the summary screen, confirm the amount and the scheduled date, then submit. Save the confirmation number for your records, and enable email or mobile alerts so you can track the payment until the funds settle.

ACH payment processing times and cutoffs

ACH transfers are processed in batches rather than individually. Banks collect payment instructions throughout the day and send them to the ACH network for clearing. Because of this batch processing system, ACH transfers usually take between 1 and 3 business days to complete.

ACH processing speed depends on several factors including cutoff times, the type of ACH transfer, and whether the payment qualifies for same-day processing.

Standard and same-day timing

ACH payments generally follow one of several processing timelines.

Same-day ACH processing requires payments to be submitted before specific network deadlines. The ACH network operates three settlement windows each day.

According to NACHA rules and Federal Reserve ACH schedules, you must submit payment files before approximately 10:30 AM, 2:45 PM, or 4:45 PM Eastern Time to qualify for same-day settlement. Same-day ACH also carries a per-transaction limit of $1 million as of 2026, rising to $10 million on September 17, 2027.

Cutoff times and business days

Most banks set internal cutoff times slightly earlier than network deadlines. This allows them to process and submit payment batches on time.

Common factors that influence ACH deadlines include:

• Bank-specific cutoff times
• Weekends and federal holidays
• International ACH processing timelines

International ACH payments

International ACH transactions (IATs) often take longer because they must comply with additional regulatory requirements and currency processing rules.

Many banks process international ACH transfers in 2–5 business days depending on the receiving institution.

ACH credit vs. ACH debit payments

The difference comes down to who starts the transfer. With ACH credit, you push money out of your account, while with ACH debit, you authorize someone to pull money from it. Choosing the right one depends on whether you're paying or being paid.

With ACH credit, you decide when the money leaves your account, which makes it the standard for paying vendors via ACH and running payroll. ACH debit hands that timing to the biller, so it fits recurring charges like software subscriptions and utility bills.

Because debit lets a third party draw from your account, it always requires prior authorization through a signed or online agreement.

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ACH payment fees and limits

ACH payments are widely used because they're significantly cheaper than other electronic payment methods. While exact costs vary by bank or processor, ACH fees remain relatively low.

Typical ACH fees

ACH is one of the cheapest ways to move money, usually costing anywhere from nothing to a few dollars per transfer. Typical ACH costs include bank ACH fees and third-party fees. Bank ACH fees run about $0–$3 per transaction, while third-party processor fees are roughly 0.5%–1.5% per transaction.

Wire transfer fees are typically $25–$50 per transaction. This cost difference is one reason many businesses choose ACH transfers over wire transfers for recurring vendor payments or payroll processing.

Transaction limits

Most banks impose limits on ACH transfers to reduce fraud risk and manage transaction volume.

• Daily limits: Many banks allow daily ACH transfers between $25,000 and $100,000 depending on the account type. Business banking accounts usually have higher limits than personal accounts.
• Monthly limits: Some banks also impose cumulative monthly limits on outgoing ACH transfers. These limits help control large transaction volumes and prevent unauthorized transfers.
• Per-transaction limits: Individual ACH transfers may be capped based on account type or payment method. Same-day ACH transactions also have network limits set by NACHA.
• Business versus personal account differences: Business accounts typically support higher transaction volumes and batch processing capabilities. Personal accounts usually have stricter limits and fewer automation features.

ACH vs. wire transfer

The main differences between ACH and wire transfers are cost and speed. ACH is cheaper and slower; wires are faster and pricier. ACH payments usually cost nothing to a few dollars and settle in 1 to 3 business days, while a wire runs roughly $25–$50 and settles in hours.

Choose ACH for payments you run on a schedule, like biweekly payroll and recurring vendor invoices, where a day or two of settlement time is fine. Choose a wire when you're up against a same-day supplier deadline, sending a high-value payment, or moving funds internationally.

Common ACH payment issues and how to fix them

Even though ACH transfers are reliable, issues can occasionally occur. These problems usually relate to incorrect information or account restrictions.

Failed or rejected payments

Most ACH failures trace back to a few predictable causes:

• Incorrect account information: Entering the wrong routing number or account number is one of the most common ACH errors. Double-check the numbers against a voided check or bank statement before submitting, and confirm them directly with the recipient if the payment is new.
• Insufficient funds (NSF): If your account balance doesn't cover the payment amount, the transaction may be rejected. Set up low-balance alerts or link a backup funding source to avoid NSF fees and repeated failed attempts.
• Closed or frozen accounts: If the recipient's account is closed or restricted, the bank will return the payment. Reach out to the recipient to get updated banking details before resubmitting the transfer.

Most banks allow you to retry a failed transaction after correcting the issue.

Canceling or reversing a payment

ACH transactions can sometimes be reversed, but strict rules apply:

• Time windows for cancellation: You may be able to cancel a pending ACH payment before it enters the bank's processing batch
• Reversal request process: Banks typically allow reversals only in cases such as duplicate payments, incorrect amounts, or unauthorized transactions
• Dispute procedures: If you believe a payment was unauthorized, you can submit a dispute through your bank's ACH return process

Because cancellation windows are so tight, verify payment details before submitting and act quickly if something looks wrong.

How to keep ACH payments secure

Because ACH transfers move funds directly between bank accounts, security should be a priority. Fortunately, several best practices can significantly reduce fraud risk.

Verify recipient details before sending

Always confirm routing numbers and account details before sending payments. Many businesses verify ACH payment details, such as vendor banking information, during the onboarding process to reduce the risk of payment errors or fraud.

Confirm payment instructions through a trusted channel, such as a direct phone call or secure vendor portal, rather than relying on email alone.

This practice helps prevent fraud schemes such as business email compromise, where attackers attempt to redirect payments by sending fake banking instructions.

Use secure networks

Protect your banking credentials and payment data by using secure technology.

• Avoid public Wi-Fi networks when accessing banking portals. Public networks may expose sensitive information to interception.
• Use multi-factor authentication. MFA adds an extra layer of security by requiring a second verification step during login.

You should also ensure that devices used for financial transactions are protected with up-to-date security software. Regularly installing operating system updates and antivirus protections reduces vulnerabilities that cybercriminals may exploit.

Businesses often restrict ACH payment access to approved devices or secure company networks to further reduce risk.

Enable alerts

Many banks allow you to receive real-time alerts for ACH transactions. Notifications help you detect suspicious activity quickly.

Setting up multiple types of alerts can strengthen your oversight. For example, you might receive notifications for large transfers, new payees, or failed payments. This visibility allows finance teams to quickly investigate suspicious activity and resolve issues before they escalate.

Monitor accounts

Review your bank activity regularly to ensure all payments are legitimate. Checking your transaction history helps you confirm that vendor payments, payroll transfers, and recurring charges were processed correctly. It also allows you to identify errors such as duplicate payments or incorrect amounts.

Many businesses schedule periodic financial reviews as part of their internal controls. When paired with reconciliation software, this process can significantly improve financial oversight.

Prevent fraud

You can put additional controls in place to protect ACH payments from fraud:

• Dual approval workflows: Two authorized users must approve large ACH transfers before processing
• Vendor verification procedures: Companies confirm vendor banking information through secure communication channels
• Fraud screening across payment signals: For example, Ramp Bill Pay's AP Agent screens each bill for fraud across 60+ signals, flagging risks before a payment goes out
• Payment audit trails: Automated platforms track transaction history and approval steps

Automate your ACH payments with Ramp

No matter which payment processor or method you choose, Ramp's modern finance platform can help improve your payment processing workflows. From checks and card payments to same-day ACH and international wires, our AP automation software lets you manage all your payments from a single dashboard.

Ramp Bill Pay uses AI to automate your entire accounts payable workflow, from processing invoices to scheduling payments. With all your payment data in a unified dashboard, you can quickly find any invoice, analyze monthly spend, and find opportunities to optimize cash flow.

With Ramp, you have access to:

• ACH (Direct deposit): Ideal for payroll, recurring vendor payments, and predictable disbursements. Ramp supports both regular and same-day ACH for faster delivery on eligible bills.
• Domestic wire transfers: Great for large, time-sensitive payments. Ramp enables same-day domestic wires for eligible transactions, with secure processing through the Fedwire network.
• International wire transfers: Ramp supports payments to vendors abroad in US dollars or payments to international vendors in their local currency
• Ramp cards: Pay vendors that accept Visa by card, either with your existing cards or one-time-use Ramp cards, and earn cashback
• Check payments: For US-based vendors who still prefer checks, Ramp can issue and mail checks on your behalf.

Ready to learn more? Watch our demo video to see how Ramp customers save time and money.