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Talk to our experts- ACH payment
- An ACH payment is an electronic payment between bank accounts that moves on the ACH (Automated Clearing House) Network, which reaches all US bank and credit union accounts. In B2B, a buyer can push an ACH credit to pay a supplier's invoice, or the supplier can pull an ACH debit from the buyer's account with the buyer's authorization.
Also called: electronic bank transfer, eCheck
How it works
Nacha governs the ACH Network. It does not process ACH payments itself; payments on the network are handled under the Nacha Operating Rules, which every participant must follow. Nacha describes each payment through the roles it passes between, from the originator to the receiver, the account holder at the receiving bank:
How an ACH payment moves
The business that starts the payment sends the instruction to its bank.
The originating depository financial institution sends the payment file to an ACH Operator.
The Federal Reserve or The Clearing House sorts each transaction to the right bank.
The receiving depository financial institution credits or debits the receiver's account.
The ACH Network is open for processing 23¼ hours every business day and settles payments four times a day. Payments settle when the Federal Reserve's settlement service is open, which currently excludes federal holidays and weekends.
ACH credits vs. ACH debits
- ACH credit (push): the payer sends money out. Direct Deposit of pay is Nacha's example. In B2B, the buyer originates the credit to pay a supplier. ACH credits can settle the same day, the next banking day, or in two banking days.
- ACH debit (pull): the payee collects money in, under the payer's authorization, which can be a standing authorization or a single payment. In B2B, the supplier originates the debit from the buyer's account. By Nacha rule, an ACH debit cannot have a settlement date more than one banking day into the future.
Same Day ACH went live in 2016. It has a $1 million per payment limit. Nacha says that limit will rise to $10 million on Sept. 17, 2027, creating opportunities for business payments such as invoice payments.
ACH in B2B payments
Nacha describes B2B payments as businesses paying suppliers online instead of by check, and calls B2B payments the ACH Network's most significant growth segment. For a seller on net terms, ACH gives two ways to settle an invoice: the buyer pushes an ACH credit by the due date, or the seller debits a bank account the buyer has authorized.
Example
A plumbing distributor ships 120 cases of fittings at $40 a case to a contractor on net 30 terms: 120 x $40 = $4,800.
- ACH credit: 28 days into the net 30 terms, the contractor originates a $4,800 ACH credit, and its bank sends it through an ACH Operator to the distributor's bank.
- ACH debit: the contractor instead authorized the distributor to debit its account. On day 30, the distributor originates a $4,800 ACH debit, and its bank sends it through an ACH Operator to the contractor's bank.
Either way, the distributor's accounts receivable for that invoice drop by $4,800 once the payment settles.
On Shopify
Shopify B2B runs on the Basic, Grow, Advanced and Shopify Plus plans, and Shopify's B2B features by plan list Automated Clearing House (United States only) on all four.
- ACH Direct Debit: a direct debit payment method for Shopify Payments, available to customers with a United States bank account when paying for B2B orders. The buyer authenticates their bank account to verify the payment. It can take up to 4 business days to confirm success or failure, the order shows as Pending until the payment is processed, and ACH Direct Debit is a non-guaranteed payment method, so failures and disputes can occur.
- Eligibility: your store must be in the United States, accept USD, have fulfilled more than 100 orders, be on an active plan after the trial, and have completed identity verification for Shopify Payments.
- Vaulted bank accounts: B2B buyers can save a bank account to a company location. For an order with payment terms, the buyer chooses which account to debit at the end of the terms. The account isn't debited automatically: you debit it from the admin or automate it with Shopify Flow.
- Manual payment methods: a bank transfer or bank deposit can be set up as a manual payment method, and you record the payment on the order after you receive it.
How Uncap helps
Uncap Portal gives trade accounts a self-serve home on Shopify, with catalogs, pricing, reorders, invoices, and users. It puts NET terms, invoices, and payments in the portal, so buyers reorder, track, and pay from a portal built for their account.
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Frequently asked questions
How long do ACH payments take?
Nacha says ACH credits can settle the same day, the next banking day or in two banking days, and ACH debits the same day or the next banking day. On Shopify, an ACH Direct Debit for a B2B order can take up to 4 business days to confirm.
How do I pay someone via ACH?
As the originator, you send the payee's bank details and the amount to your bank (the ODFI), which sends an ACH credit through an ACH Operator to the payee's bank. A supplier can instead debit your account if you authorize it.
How do I know if my ACH payment went through?
On Shopify, an ACH Direct Debit for a B2B order keeps the payment status Pending until the payment is fully processed, and it can take up to 4 business days to receive confirmation of success or failure.
Is there a downside to ACH payments?
On Shopify, ACH Direct Debit is a non-guaranteed payment method. Payments can fail, for example for insufficient funds or because the buyer turned off debits, and buyers can dispute them through their bank for up to 60 calendar days, or longer in some cases depending on their bank.
