| are numerous different types of payment systems, | | | | through the ACH. This method of electronic payment |
| such as credit cards, checks, wire transfers, bank | | | | processing makes it convenient for consumers; |
| drafts, point of sale machines, as well as many others. | | | | especially those who do not like to carry a large sum |
| The World Wide Web offers the following definition | | | | of cash with them. |
| for what a payment system is: “The generally | | | | The ACH payment system uses what has been |
| accepted method of payment for trade in an | | | | termed the “Standard Entry Class |
| economy.” | | | | Code.” This system of coding assigns a certain |
| Consumers worldwide use payment systems | | | | three-digit code to each payment, so the ACH system |
| everyday when conducting daily activities such as | | | | will be able to recognize what type of payment it is. |
| shopping and paying bills. If you use an ATM card, or a | | | | There are currently codes in use for the following |
| credit card to pay for goods and services, or to pay | | | | types of payments; accounts receivable entries, |
| your bills, it is important to understand what an ACH is | | | | corporate cash disbursements, death notification |
| all about. | | | | entries, point of purchase, prearranged payments and |
| ACH, which stands for “automated clearing | | | | deposits, represented check entries, telephone initiated |
| house”, is actually an electronic banking network | | | | entries, web initiated entries, and destroyed check |
| that operates only in the United States. This network | | | | entries. |
| processes huge amounts of electronic payments, such | | | | With so many payments being processed by the ACH |
| as debit and credit card transactions. The automated | | | | payment system, it would be impossible for one entity |
| clearing house also processes payments to individuals | | | | to handle all of them. For this reason, payments are |
| such as the direct deposit of their paychecks, direct | | | | processed by certain companies depending upon what |
| deposit of tax refunds, as well as other government | | | | region of the United States the payment originated in. |
| benefit checks. | | | | While some companies processing payments for the |
| Consumers use this particular payment system to | | | | ACH payment system do so for numerous stares, |
| execute payments for their mortgages, car insurance, | | | | there are some that handle payments for only a single |
| health insurance, utility bills, and many other bills that are | | | | state. |
| paid on a regular basis. Consumers also utilize POS | | | | As you go through your daily activities, make a note of |
| machines when shopping for groceries and other | | | | every time you happen to use your credit or debit |
| goods at retail stores. A POS machine, also known as | | | | card, or even write a check. You may not realize it, but |
| a “point of sale” terminal, allows the | | | | every time you use one of these methods to pay for |
| consumer to make an automated payment using their | | | | something, some sort of payment system is |
| debit or credit card. This payment is then processed | | | | processing your payment. |