As your small business grows, you need tools to help streamline operations. Automated Clearing House (ACH) can help you digitize payroll and vendor payments, saving time and resources.

What is ACH?

ACH is a type of electronic payment that transfers funds between U.S. bank accounts through a network of financial institutions. Established in the 1970s, the ACH network enables you to digitally move funds between your own bank account and a vendor or employee bank account.

Trillions of dollars route through ACH payments each year, including PayPal, Venmo, and Zelle®1 transactions. In fact, 2022 was a record year2 with more than 30 billion ACH payments, which averages about 90 ACH payments per U.S. citizen.

How do ACH payments work?

There are two types of ACH payments: credit and debit.

ACH credit
With an ACH credit, also known as a direct deposit, you “push” funds from your bank account into an employee’s or vendor’s bank account. The payer initiates the transaction. It takes three steps:

  • Step 1: Obtain the vendor or employee’s name, bank name, account type, account number, and bank routing number.
  • Step 2: Submit payment details through Wells Fargo Business Online® or Commercial Electronic Office® (CEO®) ACH that includes the account information and payment amount.
  • Step 3: The funds are transferred from your account on the designated date.

For recurring payments, such as payroll, rent, or mortgage, you can use the ACH network to set up automated ACH credits.

ACH debit
For an ACH debit, also known as a direct payment, money is “pulled” from one account to another. With the payer’s permission, the recipient initiates the transaction to withdraw funds from the payer’s account. The payer provides the recipient the same banking information as listed in Step 1 above. The recipient submits the payment file to their bank and pulls funds from your bank account.

For example, you might set up automated ACH debit for your utility bills, which arrive monthly but vary in cost each month. See how direct payments can help your business.

How can I use ACH?

In 2022, there were more than 8 billion direct deposit ACH payments overall. One of the more familiar uses of the ACH network is for direct deposit of payroll3. But ACH has other useful applications for small businesses, too. For example, you can use the ACH network for:

  • Employee payments, such as reimbursed travel expenses or 401(k) contributions.
  • Vendor payments, including those for suppliers, rent, or utilities.
  • Government payments, such as tax payments and refunds, Social Security payments, and stimulus payments.
  • Investment dividend and interest payments, including monthly payments.

What are potential advantages of ACH?

There are several advantages for your small business in using ACH payments.

  • Cost savings: ACH payments are less expensive compared to paper checks, credit card transactions, and wire transfers.
  • Convenience: You will no longer need to take time printing, signing, and mailing paper checks, and making runs to the post office or bank. You can make ACH transactions from your office or while working remotely at home. The automated process of the ACH network makes it easy to schedule recurring payments, so there’s no need to set a calendar reminder or keep track of paper invoices for these standard charges.
  • Faster processing times: ACH payments can process as quickly as the same day or up to three days. That fast turnaround can help with your cash flow and let you know sooner if a payment from a vendor is declined.
  • Security: ACH payments eliminate the need to mail paper checks, which are vulnerable to fraud. Your personal and account data are encrypted with each ACH transaction, for your protection. If there are any ACH errors, there are rules and regulations in place to help protect you.
  • Consistency: By scheduling recurring ACH payments, you’re creating a more consistent cash flow that’s easier to forecast.

How do I get started making this type of ACH transaction?

It’s easy to establish ACH payments for your small business.

Talk to your banker today to find out how to set up ACH payments. Your banker can provide information on enrollment, limits, fees and more.

You can also reach out to set up an appointment or connect with a Wells Fargo Business Banking Advisory Specialist by calling 1-844-807-5060.


1 Enrollment with Zelle® through Wells Fargo Online® or Wells Fargo Business Online® is required. Terms and conditions apply. U.S. checking or savings account required to use Zelle®. Transactions between enrolled users typically occur in minutes. For your protection, Zelle® should only be used for sending money to friends, family, or others you trust. Neither Wells Fargo nor Zelle® offers purchase protection for payments made with Zelle® – for example, if you do not receive the item you paid for or the item is not described or as you expected. The Request feature within Zelle® is only available through Wells Fargo using a smartphone. Payment requests to persons not already enrolled with Zelle® must be sent to an email address. To send or receive money with a small business, both parties must be enrolled with Zelle® directly through their financial institution’s online or mobile banking experience. For more information, view the Zelle® Transfer Service Addendum to the Wells Fargo Online Access Agreement. Your mobile carrier’s message and data rates may apply. Account fees (e.g., monthly service, overdraft) may apply to Wells Fargo account(s) with which you use Zelle®.

2 “ACH Network Sees 29.1 Billion Payments in 2021, Led by Major Gains in B2B and Same Day ACH,” Nacha, February 3, 2022

3 “ACH Volume and Value Statistics,” Nacha, 2023

PayPal and the PayPal logo are trademarks of PayPal, Inc.
Zelle® and the Zelle® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.