How to Set Up ACH for Payment Processing in 10 Steps

If you just googled “How to set up ACH solutions” to look for a comprehensive guide, you are in the right place! This mini-guide will help you set up ACH technology for yourself or your business to process payments at a low transfer fee quickly.

Steps on How to Set Up ACH Solutions

Step #1: Choose the Right Payment Processor

Choosing a suitable payment processor will help you throughout your ACH journey. The best payment processors offer the following benefits:

  • Excellent customer service
  • Additional tools
  • Top-notch security

Top payment processors go the extra mile to customize their offering according to your needs.

Step #2: Set up Your Account

The best payment processors offer a seamless setup experience for their customers. They help their clients set up ACH payments processing accounts and educate them on the best practices for an efficient funds transfer process.

The benefits of setting up an account on the ACH network with a reliable partner include:

  • Low processing fees (as compared to a card or wire transfers)
  • Fast processing (the ACH technology is growing at a rapid pace, and Nacha is revamping its tech stack to offer the best possible customer service)
  • Seamless recurring payments (an ACH payment is the best possible method for a small business owner to send and receive payments regularly without any manual intervention)

Step #3: Fill out the Necessary Forms

The partner you choose will ask you to link your bank account to their payment gateway solution and fill up several different forms to speed up the process. A customer-friendly partner will always be available to answer all your questions and help you fill out the forms correctly.

Your payment processor will now complete most of the processes to set up the account at their end. They might ask you to fill up a couple more forms to prevent fraudulent transactions and offer an additional layer of security.

Now that your account is set up, it is time to process your first payment through ACH.

Step #4: Understand and Choose the Right Type of ACH Payment

ACH payments are classified mainly into two types:

  • Single Payment: Such payments are usually used between individuals to process funds just one time.
  • Recurring Payment: Recurring payments are usually helpful while processing salaries for employees or vendor payments. This payment method is commonly used by business owners who need to process funds on a monthly/weekly basis. ACH is the preferred mode of payment for sending and accepting payments regularly due to the low transaction fees.

Choose the correct type of payment method while processing a new transaction. If you have doubts, you can always reach out to your payment processor for help. The Nacha-preferred partners for ACH solutions stay up to date with the latest changes in the payment processing industry and offer reliable customer services.

Step #5: Understand and Choose the Right Entry Class Code

Depending on the payment type, you have to select the correct entry class code for the financial institution to process the funds seamlessly.

You can  learn more about the different types of ACH entry class codes.

Step #6: Read the Terms and Conditions

Before hitting send or submit, it is good to read the relevant terms and conditions associated with the transfer. The best payments solutions providers will have no hidden terms and conditions or hidden costs to process the payments cost-effectively.

Step #7: Fill Authorization Forms for Transfer

Download and fill out the ACH debit or ACH credit authorization form to start the process. It is a great idea to rely on your payments processor for guidance while filling out this form for the first time. Some of the crucial details that you need to fill on these authorization forms include:

  • Bank account details for both you and the lender
  • Routing number
  • Account number
  • Type of ACH transaction
  • Authorization signatures

Learn how to fill out an ACH authorization form correctly.

Step #8: Have Multiple Copies of Authorization Forms

If you are filling out the authorization forms in writing, it is good to keep a couple of forms handy. If you make a mistake while writing essential details such as the bank account numbers, you should ideally start over on a new form instead of scribbling on the old one. Banks and financial institutions may reject your ACH payments application if they find the writing on it illegible.

Step #9: Keep a copy of the Completed Authorization Form Handy

It is a good idea to keep the completed authorization forms handy even after completing the transfer process. These forms will come in handy when and if you need to settle any disputes at a later stage.

Step #10: Track Activity and Reports

The best payment processors often offer an additional layer of reporting and analytics to help you track the growth of your business seamlessly. Use these tools to your advantage.

The world of ACH payment solutions processing is getting more efficient every day. In the last two decades, Nacha has adopted state-of-the-art technologies to offer the best experience to its customers. The ACH payments that took several days before now take only one to two business days.

Want to learn more about the world of payment processing and paper checks? Reach out to us today and see how we can help you take your business to the next level!


Date originally published: January 25, 2022

iCG Pay’s innovative solutions help you accelerate payments simply, securely, and reliably.

We help businesses accept and process payments with our suite of next-gen customizable fintech solutions. Our automated technologies help you carry out ACH and credit card transactions on a single easy-to-use platform.