ACH For Lenders: Understanding ACH Payments and Loans

By Payliance | 02/26/19

Before the advent of electronic payments, funds were sent by check, money order, or other types of paper transactions, including cash. Since then, the way both businesses and consumers send and receive money has evolved. Stemming from this evolution was the adoption of ACH payment processing.

What is ACH Payment Processing?

An ACH, or Automated Clearing House transaction is a digital transfer of funds from one bank account to another utilizing routing and account numbers.

The system relies on authorization from a receiver (borrower) to an originator (lender) for each transaction that is launched into the ACH process. Once authorized, an originator will initiate an ACH transaction to move the funds. A borrower can both receive loan funds or make loan repayments through the ACH network.

Understanding ACH Payment Processing

ACH transactions are not posted in real time. Instead, the transaction moves through a batch process, with the Federal Reserve serving as the central control point. Standard ACH transactions work through this process overnight, while same day debits and credits are possible.

Flexible cut-off times provide lenders with the tools needed to meet customer expectations while managing costs.

Payliance Flexible ACH Payment Processing Cut-Off Times


Payliance Cut Off

Transaction Posts to Receiver’s Account

Same Day Transaction

Noon EST (Mon – Fri)


Standard Transaction

8:30 pm EST (Mon – Fri)

Next Banking Day

Non-Bank day Transaction

7:00 pm EST (Sunday or Other Non-Banking Day)

Next Banking Day

How ACH Payment Processing Benefits Lenders

ACH processing provides lenders with a range of benefits to help manage the way they collect electronic payments. ACH processing makes it fast, easy and secure to process and control recurring and one-time payments and disbursements which streamlines operations, saves time, and minimizes processing costs.

With ACH processing, lenders can benefit from:

  • Lower Cost of Payment Acceptance and Processing: Lenders can process a one-time or recurring ACH payment for less than the cost of processing checks or debit cards.

  • Streamlined Processes: Electronic ACH payments process more quickly than traditional paper payment options which streamlines processes and saves valuable time.

  • Flexible Cut Off Times: Late cut-off times and Sunday processing ensure funds are available to borrowers as quickly as possible.

  • Secure: Account verification and risk management provide a secure avenue to transfer funds between lenders and borrowers, reducing the risk of fraud and tampering.

  • Convenience: ACH also helps lenders fulfill the needs of their borrowers with convenience since it supports multiple payment use cases including mobile payments, recurring payments, online payments, and payments by phone.

  • Recurring Payments: Rather than manually handle recurring payments, lenders can set a repeating schedule for each customer and put recurring payments on autopilot to save time and improve operational efficiencies.

Payliance is a fintech partner that specializes in flexible ACH payment processing and risk mitigation software solutions. Our solutions make ACH payments fast, easy and secure to process and manage, streamlining your operations and saving valuable time and money.

Start an easy online application to begin securely processing recurring, online, and mobile payments or request a consultation to speak with our payment experts.

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