ACH (Automated Clearing House)

ACH, the Automated Clearing House, is the electronic network that handles most bank-to-bank money transfers in the United States. It processes transactions in batches — direct deposits of payroll, bill payments, business-to-business payments, government benefits, and more — moving money between bank accounts without cards, checks, or wires. When an employer direct-deposits a paycheck, a utility auto-debits a bill, or a company pays a vendor electronically into their bank account, it typically runs over the ACH network.

For marketing and affiliate purposes, ACH matters mainly as a payout method. Affiliate programs and networks commonly pay affiliates by ACH (direct deposit into their bank account) because it's inexpensive and standard for domestic US payments — cheaper than checks or wires and integrated into the banking system. It's one of the main ways the money earned in performance marketing actually reaches the people who earned it.

ACH's defining characteristics are low cost and batch processing. Because it bundles transactions and settles them in batches rather than instantly, ACH is cheaper than wire transfers or card payments but slower — historically taking a day or more to settle, though 'same-day ACH' has sped this up. For routine, non-urgent, domestic transfers like payroll and affiliate payouts, that trade-off — cheap and reliable, if not instant — is exactly right, which is why ACH dominates these use cases.

Compared with alternatives: wires are fast but expensive (used for urgent or large transfers); card payments suit consumer purchases but carry processing fees and chargeback risk; instant payment rails and services offer speed; and ACH is the low-cost workhorse for recurring, batch, domestic bank transfers. For an affiliate program paying many affiliates regularly, ACH's low per-transaction cost makes it economical, where higher-fee methods would erode payouts.

In affiliate and business payments, ACH is valued for moving money to people's bank accounts cheaply and at scale. A program paying hundreds or thousands of affiliates benefits from ACH's low cost; the trade-off is the settlement delay (affiliates wait a little longer than with instant methods) and that it's primarily a US domestic system (international payments use other rails). It pairs naturally with payment thresholds and batch payout schedules, since ACH itself works in batches.

The failures are choosing a high-fee payout method where ACH would save money for routine domestic payments, not accounting for ACH's settlement delay in expectations, and assuming ACH for international affiliates (where it doesn't apply). The discipline is to use ACH as the economical default for domestic, recurring, non-urgent bank payments like affiliate payouts — matching the method to the payment's cost, speed, and geography needs.

The Automated Clearing House (ACH) network has handled US batch bank-to-bank transfers since the 1970s, becoming the low-cost standard for direct deposit, bill payment, and recurring payouts such as affiliate commissions.

Etymology: source.

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