What does ACH stand for in payment processing?

ACH stands for Automated Clearing House, which is a network used for electronically moving money between bank accounts. This system enables the processing of various types of financial transactions, including direct deposits, bill payments, and interbank transfers. The ACH system is widely used because it is efficient and reduces the need for paper checks, making transactions faster and more secure.

This term is important in payment processing as it represents a backbone for many electronic transactions in the U.S., streamlining the movement of funds while ensuring accuracy and reliability. The implementation of ACH has revolutionized how businesses and consumers handle payments, contributing to the rise of electronic banking and e-commerce.

The other options do not accurately reflect the terminology and role of the system within the financial ecosystem, making them unsuitable in this context.