ACH Payments
ACH (Automated Clearing House) is the primary electronic payment network in the United States, processing the majority of direct deposits, bill payments, and B2B transfers through a batch processing system.
ACH is operated by two networks — The Clearing House (CHIPS) and the Federal Reserve (FedACH) — and processes trillions of dollars annually. Standard ACH settles in 1–3 business days; Same-Day ACH settles within hours on the same business day.
ACH economics for embedded finance: ACH is low-cost from a processing perspective ($0.20–$1.00 per transaction versus 1.5–3% for cards) but traditionally generates less revenue per transaction. Platforms monetize ACH through premium pricing (same-day fees, enhanced remittance fees), monetized ACH programs (charging suppliers for accelerated payment), and aggregated payment services.
ACH leakage: most embedded finance programs significantly undermonetize their ACH volume. A program running $50M annually in ACH payments at $0.75 monetized-ACH revenue on 20% of volume generates $750K. The same program at $2.00 on 40% of volume generates $4M. The 5x gap is architectural, not volume-driven.
Key ACH compliance: NACHA rules govern ACH origination. ODFIs (Originating Depository Financial Institutions) bear significant compliance responsibility for ACH transactions. Programs originating ACH through a sponsor bank must maintain NACHA-compliant authorization and returns management.