Direct Payment for Financial Institutions

Build loyal, long-term customers

Whether you are looking to build your business or consumer customer base, Direct Payment via ACH can help you strengthen and grow those relationships.
By offering Direct Payment to your business customers, you help them benefit from the time and cost savings of simplified accounting and administrative processes, as well as enhanced cash forecasting and management.

Direct Payment allows consumers to benefit from its convenience, safety and protection. Customers who pay electronically tend to be more loyal, maintain higher balances, and use more value-added services.

Provide flexibility and ease

For businesses, Direct Payment:

• Simplifies the collection and disbursement processes for business customers
• Streamlines reporting and reconciliation
• Enhances cash management
• Provides a convenient and cost-effective payment option that also offers choice and flexibility for your customers

For consumers, Direct Payment:

• Empowers consumers to decide how they pay bills
• Allows them the flexibility to pay using your online bill payment service
• Enables them to authorize companies to originate recurring and single-entry payments

Businesses and consumers can use Direct Payment for:

• Cash concentration and disbursement
• Charitable donations and recurring gifts
• Credit card, utility, cable and telecommunications bill payments
• Insurance, tax, lease and homeowners' association (HOA) payments
• Investment and savings plans
• Mortgage, vehicle and other loan payment
• Subscriptions and membership fees
• Tuition payment plans
• Vendor and supplier payments

Keep businesses and consumers protected

Direct Payment transactions are safe: Because money is transferred directly between accounts, it is a secure method of sending and receiving electronic payments that reduces fraud and the risk of identity theft.

Calculate Savings


Visit our calculator to give your business customers a quick estimate of the savings they can achieve using Direct Payment.

Get Started

Contact your Regional Payments Association for assistance and services that will help you talk to your customers about Direct Payment.

The Regional Payments Associations, through their membership in NACHA - The Electronic Payments Association, are specially recognized and licensed providers of ACH management, education, assistance and services to all types of financial institutions (commercial banks, savings banks, and credit unions) across the United States and its territories.


Use these resources to help promote Direct Payment to your business and consumer customers.

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Yes. Companies may refer to Direct Payment via ACH by terms such as automatic bill payment, automatic debit, electronic bill payment, e-check, or direct debit. Some use special brand names to refer to a payment option that uses Direct Payment via ACH for the transaction.
Yes. Your transactions are safe and confidential since money transferred electronically passes through fewer hands than a paper check. Also, federal regulations and banking rules provide consumers with protection regarding electronic payments.
Direct Payment via ACH is used by many people, and in different ways. Billions of payments are made annually using Direct Payment via ACH, for payments as diverse as mortgage and bill payments, charitable donations and investment fund contributions.
If you have enrolled in Direct Payment via ACH by authorizing the company you pay to withdraw funds from your account on a recurring basis, the authorization form should have provided information on how to revoke authorization and discontinue the automatic withdrawals. You can also contact the billing company or check its website for instructions or a new form. If you are using your bank or credit union’s online banking service, contact your financial institution.
Many companies and government agencies offer Direct Payment via ACH to consumers for loan, subscription, insurance, utility, tax, and other bill payments, or to make charitable donations or fund investment accounts.
Direct Payment via ACH is the electronic transfer of funds for making a payment. Its flexibility allows you to control how and when you pay, depending on the bill that needs to be paid. You can initiate a payment using a bank or credit union’s online bill payment service or authorize a company or government agency to initiate the payment. For example, you might enroll to pay certain bills by Direct Payment via ACH on a recurring basis, typically monthly. You may pay other bills by logging in to those billers’ websites each month, authorizing a payment through a telephone call, or using your mobile device. In addition, you might pay some of your bills through your bank or credit union’s online banking service. In all cases, the funds are withdrawn from your checking or savings account and transferred electronically by Direct Payment via ACH to pay the bill.


Yes. Once you have authorized the Direct Payment via ACH, the transaction is processed electronically. That means fewer people see your information, and multiple levels of security are in place to protect your information.
Federal consumer protection regulations and banking rules protect you from unauthorized debits from your checking or savings account and provide recourse. Contact your financial institution for assistance immediately should a transaction that you did not authorize post to your account.
Contact your financial institution and the company that was paid. Federal consumer protection regulation and banking rules protect you from unauthorized debits from your checking or savings account and provide recourse. Your bank or credit union will advise you of its procedures and the specific actions to resolve the problem. In most cases, any error can be resolved quickly.
Problems with Direct Payment via ACH are rare and generally easy to correct. If the wrong amount is withdrawn from your account, notify your bank or credit union. Your account is protected against unauthorized debits under federal regulations and banking rules.
Just as when you write a check, you are obligated to have sufficient funds in your account to fund a transaction made using Direct Payment via ACH. If you do not have enough money in your account, your financial institution may return the payment due to insufficient funds, and you may be charged extra fees by your bank or credit union, and the company you need to pay.
Problems with Direct Payment via ACH are rare and can usually be corrected quickly. If you do have a problem, notify the company you paid if you authorized the company to withdraw funds from your account to pay a bill. Contact your bank or credit union if the Direct Payment was made through its online bill payment service.
Typically, there is no fee for using Direct Payment via ACH, particularly for recurring payments that you pre-authorize, or for authorizing a company to initiate a Direct Payment via ACH to pay a bill. Although many banks and credit unions do not charge a fee for using their online bill payment services, this could vary. Some government agencies, electronic tax filing and other service providers might charge a convenience fee for all payment types. Direct Payment via ACH can save you money in postage, checks and even late fees.
If you have authorized a company to initiate a Direct Payment via ACH transaction to withdraw funds from your account to pay a bill on a one-time or recurring basis, the funds are typically withdrawn the business day following the holiday. If you are using your bank or credit union’s online banking service to pay a bill using Direct Payment via ACH, the funds might be withdrawn the business day before the holiday to ensure the payment is received by the due date. Contact your bank or credit union for additional information regarding its service.
Ask the company directly. Increasingly, companies are encouraging consumers to switch to paperless, electronic billing as a greener option, particularly if they are using Direct Payment via ACH.
You set the scheduled payment date when you sign up, make it on your online bill payment service, or authorize it on a company’s website. If the payment date varies, the company is required to send a written notice seven days before the payment date. If the date falls on a federal holiday, the money will be withdrawn on the next business day.
Some bills, such as your automobile loan, are a fixed amount for each payment. Other bills, such as an electricity or telephone bill, may vary. If the dollar amount varies from the previously paid amount or the amount that you preauthorized, typically you will receive a written notice at least 10 days before the payment date. The company you are paying may not notify you if you agreed to forego the notice when the amount falls within a specific range. When authorizing a one-time payment by Direct Payment via ACH, such as paying your credit card bill on the card issuer’s website, you typically will receive an e-mail notifying you that a payment has been authorized for a certain amount. You determine the amount to pay when using your bank or credit union’s online bill payment service.
Signing up is easy. Check your monthly bills or statements for directions to sign up, or contact the companies that send you bills and tell them that you want to sign up for Direct Payment via ACH. Companies and government agencies typically either have authorization forms for you to complete, sign, and return or offer that capability online. Contact your bank or credit union for information regarding its online bill payment service.


Your company is required to send a written notice seven days prior to the scheduled date. Many companies select a specific day of the month, and remind customers that if that date falls on a weekend or holiday, payment will be collected on the first business day following that date.
If the customer signs up for recurring Direct Payment and the amount is for a fixed amount, that is specified in the enrollment process. If the amount varies, such as for a utility bill, you are required to notify the customer prior to the scheduled payment date or a dollar range can be specified in the enrollment process, and the customer can waive the notification. If the customer authorizes you to initiate the Direct Payment on your website, the customer enters the payment amount and notification is typically made to the specified customer email address. If the customer initiates the Direct Payment through his or her online bill payment service, the customer specifies the payment amount in that service.
There may be a dip in late fee revenue, but you save in processing and administrative costs. With Direct Payment via ACH, you will pay less for collections and gain a stabilized cash flow. Some companies have leveraged the speed, reliability and flexibility of Direct Payment to allow customers to authorize expedited or same-day payments, helping them avoid negative impact to their credit ratings.
Consumers pay more than 800 million bills each month using Direct Payment via ACH, so many of your customers may already be using it. Direct Payment is a safe and convenient way to pay and gives your customers choice, flexibility and control over their payments.
As with any new service, there are initial set-up costs, as well as ongoing costs. These costs will seem small once your company begins to realize the savings of Direct Payment via ACH, which can save you $1.50 or more per payment versus paper checks.
Businesses of any size can benefit, and should offer Direct Payment. Customers increasingly expect to be able to pay bills by Direct Payment via ACH.