What ACH Transfer Costs?
ACH transfers, such as direct deposit and direct payment, usually do not have processing costs that individuals have to bear. Nevertheless, this will require such entities to be in business banking or other arrangements and pay for the fees. Here’s a breakdown:
1. Direct Deposit Cost: There is usually not a cost that goes with an individual who receives a direct deposit. Employers, government agencies, and other organizations use direct deposit as a cost-free method of paying employees and this has become very convenient and the recipients are not charged a single penny for this service. In case an organization chooses to route its payroll through direct deposits, it may have to pay extra fees to its banks for ACH origination services. However, the fees for this bank may vary depending on the bank and the type of transactions.
2. Direct Payment Cost: In a similar way, personal account holders making the ACH transfers (automated clearing house debit) are mostly not required to pay anything directly. Direct payments are often made in the form of bill paying, subscriptions, and automatic payment systems. Any company or organization that starts using direct payment may incur ACH origination fees from their bank. This happens as the fees here can be influenced by factors such as the transaction amount and the bank fee structures.