What is the difference between ACH and other transactions?

If you shop online and pay for something with your debit card, is that an ACH payment? If you pay your bill online with your debit card, is that an ACH payment?

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  • kmv
    Lv 4
    9 years ago
    Favorite Answer

    A debit card transaction is not an ACH.

    ACH stands for the Automated Clearing House. It's kind of a go-between for merchants and financial institutions. You give the merchant your account number and the financial institution's routing number. They'll generate an electronic type of transaction that is sent to the financial institution. The FI will take the money out of your account and send it to the merchant. It all happens electronically.

    A debit card transaction is done on a card that is tied to your account by the number on the card. The card number includes the FI's ID number with the issuing agency (VISA, Mastercard) and a number that identifies your account at the FI.

    Anytime you use your card, it's not ACH.

    Source(s): Financial Institution Employee
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  • 9 years ago

    ACH (Automated Clearing House) is the banking system that handles checks and direct deposits. You need to tell the merchant your the account and routing numbers from the bottom of your checks. Since it gives the merchant all the information needed to dip into your checking account, you should trust them completely before using e-checks.

    Payments using a Visa or MasterCard number go through a different system, and offer a layer of insulation between you and the merchant; if the number is compromised you can easily get a replacement.

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  • Anonymous
    3 years ago

    That's a good question!

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