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Definition
ACH, or Automated Clearing House, is an electronic network used to process bank to bank financial transactions in batches. It is commonly used for direct deposits, bill payments, payroll, and other electronic fund transfers.

Why it matters
ACH enables secure, cost effective movement of funds between bank accounts without paper checks or card networks. It is a core part of modern payment infrastructure for businesses, consumers, and financial institutions.

Example use case
An employer sends employee salaries through ACH, allowing wages to be deposited directly into workers’ bank accounts.