Most financial institutions using ACH as a way of eliminating paper checks. It offers immediate check clearing and eliminates the acceptance of checks with insufficient funds. When a check is processed through the ACH, the money automatically is transferred from the bank the check is written from to the destination bank account.
Banks and companies using this process receive a check and process it through a machine connected to the ACH. The ACH automatically approves or declines the check based on sufficient funds in the account the check is drawn on. The business receives the payment immediately and the money is removed from the check writer's account immediately.
Consumers can request that checks are paid using the ACH or electronic option. Many businesses are converting to accept these payments. Checks paid this way can be mailed in to companies and this process can also take place over the phone without ever writing a check. The business will need the checking account information and the account holder's consent to perform an ACH transaction.