The Automated Clearing House (ACH) was set up to make the transfer of money easier and automatic via a national network of all financial institutions. ACH eliminates the need for paper checks, moving the money automatically from the originating bank account to the destination bank account. Once the funds are taken from the originating back account, ACH verifies them before transferring to the destination bank account.
Contact The Vendor
Inform the vendor that you would like to submit a payment via your checking account and that you would like the vendor to process the payment electronically. Typically, this process will have to be initiated via phone or, in some cases, over the Internet. Converting a paper check to an ACH transaction speeds up the transaction time for the vendor and also allows you to create a one-time automated payment or extend the conversion into regular monthly payments.
In the case of a lease or loan, you may initiate a one-time automated payment or regular monthly payments by filling out a form, typically available online, and submitting it along with the paper check to the banking institution.
Provide the vendor with all of your banking information, including the name of your bank, your bank account number and routing number and in some cases, a check number. The vendor will submit the information when initiating the ACH transaction. In some cases, the vendor may already have a check and may request permission to convert to ACH.
Consumers can also give vendors permission to convert a paper check to an ACH transaction by signing an agreement, giving the vendor permission to repeat the transaction electronically each month. As an alternative, many vendors subscribe to services that allow them to convert paper checks to ACH transactions without involving the maker of the check.
Verify with the vendor if the conversion is a one-time automated payment so that your checking information is not retained for monthly submissions. Otherwise, the conversion may be used to initiate regular monthly payments.
Verify that the payment shows up in your account. It may show up as “ACH Payment,” or the vendor’s information may show up as it would in a regular transaction.
Monitor your account after the check is submitted to assure that the transaction shows up automatically and needs no further action. Make certain that the funds are available, and, if the check was used to initiate regular monthly payments, make certain that the funds will be available each month.
- check in macro image by Alexey Klementiev from Fotolia.com