A Developers Guide to ACH API and How to Use It

Are you interested in using ACH payments? If you own a business, this can be an excellent choice. And integrating an API into your business will be beneficial both for you and your customers. 

But before you are ready to make the final step, there are a couple of things you will need to know about these tools and how they can be beneficial for your company. 

What Is ACH Payment?

The ACH stands for automatic clearing house, and it is a method used to complete bank-to-bank transactions. It’s been around since the seventies in the U.S., and using the ACH network can be quite beneficial. 

When it comes to ACH payments, there are several types available today, and they can be quite beneficial for users. Additionally, using this method will simplify the entire process and lower fees compared to wire transfers for example. 

It is only natural that someone would introduce an API for ACH payments that will take everything to a whole new level. The basic principle of ACH is that it works on net settlement. This means that there won’t be a huge pile of cash moving between banks since everything is completed electronically. 

The main idea is that the banks will only need to pay for a difference instead of exchanging money for each transaction. The main downside is that you won’t be able to use this method for international transactions, but it is one of the best options in the country. 

Naturally, all banks are different, and the best option would be to see all the limitations you might have when it comes to using ACH payments. 

What Are APIs? What is an ACH API?


If you are unfamiliar with the term, API is short for an application programming interface. It is a way for two programs to communicate with each other. A typical example of an API is the weather app people have on their smartphones. 

This app can communicate with the weather software and display the information on your screen. It is a form of client-server relationship between these two apps. And using an API for ACH transactions can be more than useful for so many people. 

With API ACH, a business will have a chance to easily integrate with the entire ACH network. Needless to say, this will simplify the entire process, and it can save a lot of money. The ACH network has been around since the seventies, and it offers incredible security. 

This only means that the business will lower the chances of potential fraud or errors during transactions. In this scenario, the ACH API processor will act as a bridge or connection between the business and the API network. And the communication between the two will be seamless. 

Additionally, it is possible to automate the entire process, saving both time and money and eliminating the need for manual processing. 

How To Use ACH Payments API?


Your developer team should not have any problems setting up the API for your business. The process is quite simple, and there are plenty of different options you can check out. And this is also one of the most important things when it comes to the work developers will have to complete. 

There is no universal way to set up an API, and it is mostly based on the ACH API provider of your choice. But if you decide to get an ACH payment processing API, there are a few things you will need to know. 

Your first choice will be to choose which ACH processing API you want to use. It is worth mentioning that multiple APIs can work at the same time. So, if you find two that you like, you can implement both solutions. They will work simultaneously. 

And this is one of the main reasons why you will have so much flexibility. You can easily integrate an API to both your website and app, and connect it to the entire financial system. After all, many e-commerce platforms are already using these apps. 

Finally, you can have your developer team fine-tune the API to best suit your needs. 

Getting Started 


One of the first things you will need to do is contact your bank. The reason why this is the best possible option is that many banks offer their own API you can use. And this will save you a lot of time. You will also be able to get all the necessary details about ACH payments and how they work. 

But even if you don’t want to use the specific API, you can always find a third-party software you can check out. And there are plenty of viable options. 

Choosing the Right API for Your Needs

One of the most important things is to choose the API you want to use, based on your needs. For some people, these tools can be limiting, and you need to know all about what they offer before you start using them. 

Needless to say, the first thing to do is to see whether your bank supports ACH transactions. As mentioned earlier, this is not a deal breaker. And even if your bank does not offer an API you can use, you can find it elsewhere. 

But this leads us to the second potential problem – the number of transactions. You need to know the limit before you start working with the API, and the majority of them have some limitations. So, you need to know whether the API you will use supports 100 or 1,000 monthly transactions. 

Moreover, the developer’s experience will play an important role in the decision. If you have an experienced team, nothing should be a problem. But you should still aim to get an API that is easy to use and integrate with the existing system. 

All of this will bring you one step closer to the final decision. And soon, you will be ready to start using the ACH processing API.

APIs Can Be Different

As mentioned earlier, it is possible to use multiple APIs at once. And the reason why this is crucial is that every API is different. They offer different features and functionalities, and they have different working methods. 

This is also the main reason why there is no universal solution on how to install it and how to integrate it with your existing platform. And on top of that, if you already own a website and a business, integrating an API will require a unique approach since every situation is unique. 

Many ACH payment gateway API providers will offer the necessary tools and documentation you will need to make it work. So, you won’t need to worry about how each and every API will work in advance. 

Once you decide which one you want to use, you will find the solution for the specific scenario. This is also why it is crucial for you to have an experienced team that will be there for you every step of the way. 

Benefits of ACH APIs

Using an ACH payment API can be beneficial both for your business and your customers. And there are so many reasons for this. Firstly, using ACH API can allow you to process large volumes of transactions, and the cost is relatively cheap. At least compared to wire transfers. 

While it is not possible to use ACH for international transactions (in the majority of cases) it is one of the best options for transactions within the country. It is also possible to enable recurring ACH payments, allowing your customers to easily set up a plan suitable for them. 

Since the entire ACH network has been around since the seventies, it is also one of the most secure options you will encounter. Furthermore, you will eliminate the need for additional manual work. 

There will be no need for paper checks, or manual processing of each transaction, and you can easily automate the entire process. As long as you have an experienced developer team at your disposal. 

Unfortunately, this is also one of the downsides of the solution. You will need a developer team to make it work. These apps are rarely available out of the box, which means that you will need someone to set it up before you are ready to use it. 

Why You Need It

Using ACH APIs will simplify the entire process in so many different ways. You will have a better insight into why and when errors happened, it offers scalability as your company grows, and it works in almost every single scenario. 

These tools are great for processing payrolls, payments on your marketplace, B2B payments, P2P payments, loan and lending repayments, and so much more. Especially if your business is based in the U.S. 

You should also keep in mind that ACH API providers do not work in real time. These are different from credit cards where the user can know immediately whether the transaction is good. 

The ACH network works in the batch environment, and it takes between 24 and 72 hours to finalize the entire process. So, be sure to check all the pros and cons before you decide that this is the right option for you. 

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