ACH API for Accepting ACH Transactions


ACH APIs are a secure and convenient tool for payment processing. Because of ACH APIs, we are able to seamlessly send money electronically to businesses, friends, and family. If your business is already using a payment API to process credit cards, know that some APIs accept ACH payments. This means that your company can save money with lowered transaction fees and cash directly in your bank account. 

If you’re interested in adding ACH transfers, like bank account-to-bank account transfers, into a current payment API, or if you are looking for an API that accepts ACH processing, we’re here to help.

This article will break down:

  • How ACH transactions work 
  • How ACH API payments work 
  • How to accept payments through an ACH API 
  • How to integrate ACH transfers through an ACH API 
  • The best way to send ACH transfers with an ACH API 

ACH Transactions and How They Work

ACH transfers are bank account-to-bank account transfers that occur between personal and business bank accounts in the U.S. They are known as ACH transfers because they have to transfer through the Automated Clearing House (ACH) Network, nationally operated by the National Automated Clearing House Association (NACHA). Therefore, when implementing an ACH transaction into your payment system, you must be able to apply and navigate the NACHA codes in addition to other cybersecurity and financial regulations.

We typically interact with the ACH network through direct deposit. Whenever your employer pays an employee through direct deposit, then they have set up an ACH request form through their bank. The request is then sent through the ACH network, which verifies the receiving bank account and deposits the funds. 

ACH payment processing is always facilitated through some financial institution, like a bank or credit union. You can send/receive an ACH debit or an ACH credit. ACH debits, like direct deposit, allow funds to be deposited in your account. ACH credits allow you to make deposits or payments to another bank account, such as bill pay or Roth IRA. ACH transfers are typically cheaper than other payment methods, like paying with credit cards, as ACH processing does not deal with any creditors. Instead, the bank debit will pull the cash and deposit it directly into the receiving bank account or merchant account.

How ACH Transactions Work with a Payment API

Whether you recognize it or not, most consumers are interacting with a payment API on a daily basis. E-commerce and online payments are now easier than ever, and usually what’s behind that transaction is a streamlined payment API. 

Payment APIs are application program interfaces (APIs) that contain a set of code built for one request type, which is typically payment processing. This code works similarly to other send-request codes and it contains a set of protocols, routines, and tools. Much of the time, an API will be integrated with another API for added security and functionality. For example, an authorization API might function with a payment acceptance API so that the payment acceptance API is more secure.

The most common form of a payment API will allow credit card processing. This is when a credit card is charged, but cash is deposited into a merchant account. When you are purchasing an item online, you most likely will work with a merchant who will accept payments into their merchant account. You plug in your credit card information, including expiry and CVV code, and the transaction pulls (debit) money from your credit card and deposits it to the merchant account. 

Accepting or processing ACH transfers with a payment API is slightly different. ACH transactions are bank-to-bank transactions that move through the U.S.’s clearinghouse. The U.S.’s clearinghouse network, which is controlled by the U.S. private banks, operates as a payment processor to approve and send payments from one bank account to another.

Payment APIs to Accept ACH Transactions on Your Website

Since fintech has grown in recent years, you have several types of payment acceptance options to choose from. For example, a payment API can be integrated into your finance system, on your app, and on your website. The integration will depend on how robust the development side of the API is and the back-end of the tool you want to integrate it into.

If you already are using a payment API that accepts credit cards, for example, it can be fairly simple to integrate an ACH API in order to link a bank account. 

Companies like Sila offer extensive developer documentation, which easily walks your developer through the API integration. Our API endpoints enable U.S. Know Your Customer (KYC) compliant ID verification, secure account linking, and smart contract programming, in addition to ACH transfers. 

Sila’s API also has Github SDKs for Python, Node/Javascript, C#/.net, Java, and PHP so you can easily integrate your Sila API with the compatible platform, software, or Payment API of your choice.

How to Integrate a Payment API to Accept ACH Transactions

Since the functionality of a payment API and ACH API can be robust, you’ll want to narrow down what features you need in your payment API specs. For example, some APIs will solely be a payment gateway, and another back-end API will be linked in order to process a payment or verify the bank account credentials. 

Depending on your business needs, you can choose an API that supports some of the following features: 

  • Online payment functionality, as well as in-person payment processing (such as tap)
  • Accepts number of payment options (such as credit card transactions, bank account transfers, government account credits, and bill pay)
  • Accept ACH payments
  • Merchant account linking
  • Payment gateway or API gateway
  • Verifying identity and/or authorization
  • Secure bank account linking
  • Checking consumer credit
  • Merchant account direct debit (or eCheck)
  • Setting up and managing recurring payments
  • Maintaining and tracking user accounts
  • Sending invoices
  • Digital wallets integration
  • Know Your Customer (KYC) and Payment Card Industry (PCI) compliant
  • Simple or supported integration
  • Already developed wrapper or schema
  • Low transaction fees
  • Accept international payment methods
  • Highly secure payment processing
  • Accepts cryptocurrency
  • Tokenization

When considering API integration and compatibility, you’ll want to look at the functionality of the code, if the code is common enough and serves the purposes of the payment API, if the API has supporting documentation around implementation and integration, and if there is room to grow. 

Payment APIs are designed to make a single type of request. Therefore, it will need to either be able to expand from that request internally or connect with a verified ACH API which can process bank transactions over the ACH network. 

The Best Ways to Send ACH Transactions with an API

Payment APIs need to ensure secure and simple payment transfers. In general, consumers are looking for payment flexibility. For example, there are thousands of U.S. ex-pats living abroad. Their finances may still operate in the states, but their physical location might limit them in many ways. This means when processing payment in the states, U.S. ex-pats and other foreign nationals may end up paying with a credit card or struggling to access their bank

A payment API that provides affordable and fast international money transfers allows these individuals to use the payment method of their choice and bypass costly credit card payments.

Offering flexibility for international money transfers is key. And with all financial transactions, you’ll want to minimize the cost as much as possible.

If you are looking to integrate an ACH component into your payment API, consider the following:

  • Is your customer base in the United States?
  • What is the rate that your bank charges for credit card payment processing?
  • What is the frequency of international transactions?
  • How can you minimize transfer rates?
  • Who is your payment processor, and do they also do ACH processing?

One way to speed up ACH transfers and address all these issues is to consider cryptocurrency transfer as the primary payment method of the API. Cryptocurrency is a globally secure payment method. And with the right APIs, any currency can be deposited into cryptocurrency and then transferred to another currency. 

Since an individual bank account is secured within the crypto transaction, the APIs that function with cryptocurrency facilitate a smart, secure, and affordable payment method.

ACH processing is known to be:

  • Costly
  • Slow
  • Only in USD

Therefore, while ACH payments offer many benefits, there are still major limitations to sending by integrating a payment API that accepts cryptocurrency, you are able to bypass these roadblocks.

APIs are powerful pieces of code because they are robust yet secure, a perfect combination for processing highly sensitive financial information. Free your transactions from costly credit card fees. Check out Sila API for fast, secure ACH transfers.