An automated clearing house (ACH) is a computer-based electronic network for processing transactions,[1] usually domestic low value payments, between participating financial institutions.
The first automated clearing house was BACS in the United Kingdom, which started processing payments in April 1968.
[5] This led to the first automated clearing house in the US in 1972, operated by the Federal Reserve Bank of San Francisco.
[5] ACH direct debit collections are initiated by the payee with pre-authorization from the payer; ACH direct debits include consumer payments such as utility bills, insurance premiums, mortgage loans, and other types of bills.
[46] There are various usages of ACH systems;[7] the terminology related to different types of transactions varying in different countries.