How ACH Works (and Why You Still Sometimes Need a Paper Check)
The Automated Clearing House (ACH) is an electronic funds-transfer system that facilitates secure and efficient financial transactions between banks and financial institutions. For most of our daily financial needs—like direct deposit of paychecks and monthly bill payments—ACH is the convenient, behind-the-scenes network that moves money between accounts.
Yet, even with this reliable digital infrastructure, there are still situations where you might need to send a physical, paper check. That’s where Check Supply comes in, bridging the gap between a digital-first world and the occasional requirement for a traditional payment method.
ACH Network Overview
The ACH network is managed by the National Automated Clearinghouse Association (Nacha) and serves as a central system for processing large volumes of credit and debit transactions. It connects over 10,000 financial institutions and processed more than 8.4 billion payments with a combined value exceeding $21.5 trillion in Q2 2024.
Key Participants
- Originator: The individual, business, or entity initiating the ACH transaction.
- Originating Depository Financial Institution (ODFI): The bank or financial institution that initiates the ACH entry on behalf of the originator.
- ACH Operator: Either the Federal Reserve or a clearinghouse that receives and sorts the ACH transactions.
- Receiving Depository Financial Institution (RDFI): The bank or financial institution that receives the ACH entry and credits or debits the receiver’s account.
- Receiver: The individual, business, or entity receiving the ACH transaction.
ACH Transaction Process
1. Initiation
The process begins when an originator initiates a direct deposit or direct payment through the ACH network This can be a credit (deposit) or debit (payment) transaction.
2. Batching
The originator’s bank (ODFI) collects multiple ACH requests and groups them into batches. These batches are sent out at scheduled times throughout the day.
3. Processing
An ACH operator (Federal Reserve or clearinghouse) receives the batch of ACH transactions from the ODFI. The operator then sorts the batch and prepares individual transactions for distribution.
4. Distribution
The ACH operator makes the sorted transactions available to the receiving banks (RDFIs).
5. Settlement
The RDFI credits or debits the receiver’s account based on the type of ACH transaction (deposit or payment). This action reconciles both accounts and completes the transaction.
Timing and Same-Day ACH
Traditionally, ACH transactions took a few business days to process. However, recent rule changes by Nacha have expanded access to same-day ACH. As of March 2021, most ACH transactions can be settled on the same business day, provided they are received before 4:45 p.m. ET.
Types of ACH Transactions
ACH supports various types of transactions, including:
- Direct deposits (e.g., payroll, government benefits)
- Bill payments
- Person-to-person transfers
- Business-to-business (B2B) payments
- Tax refunds
- Social Security benefits
Security and Regulation
The ACH network is regulated by the federal government and operates under strict security protocols. Nacha oversees the network to ensure it remains safe, secure, and effective.
Check Supply: Bridging the Digital World and Paper Checks
Even though ACH handles the majority of our electronic transfers, certain situations still require a paper check—maybe your landlord won’t accept online payments or a government office needs a hard-copy check for official records. In a world where so many of us rely on digital tools, writing, stamping, and mailing a physical check can feel like a step backward.
That’s why we built Check Supply: a modern check sending service designed for individuals and businesses that live in a digital world but occasionally need to send a paper check. We make it easy to send checks in the mail right from your phone—no envelopes, stamps, or post office visits required.
How Our Check Sending Service Works
-
Connect Your Bank Account Securely
Our app integrates with your bank account through Plaid, a trusted leader in financial technology. This ensures we have the correct information to print your check. Importantly, we never debit your account directly—we only use these details to create a legitimate, high-security check. -
Specify Payee and Amount
In the Check Supply app, you simply enter the name of the person or business you want to pay and the exact amount. No more awkwardly hunting for your checkbook or worrying about your penmanship. -
We Handle Printing and Mailing
Once you confirm, we automatically print your check on high-security check stock and seal it for mailing. Your funds remain in your bank account until the recipient cashes or deposits the check. -
Track Your Check
We offer real-time updates so you know exactly when your check has been printed, mailed, and received.
Conclusion
The ACH network has revolutionized electronic payments—enabling fast, secure, and cost-effective transactions—but there’s still a place in our financial ecosystem for the occasional paper check. Check Supply was built to fill that gap with a modern, app-based solution. Whether it’s a one-off payment to a landlord or a batch of business checks, we bring digital convenience to a traditionally paper-based process.
By combining the security of Plaid with automated check printing and mailing, Check Supply lets you stay in control of your funds and skip the hassle of envelopes, stamps, and post office visits. It’s proof that even the most old-fashioned payment method can benefit from a modern update.