Receiving payments efficiently is crucial for landlords and property managers. The Automated Clearing House (ACH) network offers a reliable and cost-effective way to get paid. Understanding how to receive ACH payments can streamline your financial operations.
Key takeaways
- ACH payments transfer funds electronically between bank accounts via the ACH network.
- To receive ACH payments, you typically only need to provide your bank routing and account numbers.
- Landlords can receive rent payments efficiently using ACH via specialized platforms.
- Standard ACH payments take 1-2 business days, while Same Day ACH is faster but may cost more.
- Receiving ACH payments generally involves low per-transaction fees compared to other methods.
How do ACH payments work?
ACH stands for Automated Clearing House, a network that facilitates electronic money transfers in the United States. It moves funds between bank accounts via two main types of transactions: Direct Deposits (ACH credits) and Direct Payments (ACH debits). The National Automated Clearing House Association (Nacha) governs the network rules.
Transactions are typically processed in batches throughout the day by two central clearing houses: the Federal Reserve and The Clearing House. The Originating Depository Financial Institution (ODFI) initiates the payment, and the Receiving Depository Financial Institution (RDFI) receives it on behalf of the end recipient.
The Clearing House’s EPN system processed 20.7 billion transactions in 2024, showing a 6.2% year-over-year increase from 2023. The total value of these ACH transactions reached $56.4 trillion in 2024, a 7.6% increase over the previous year.
In the first quarter of 2025, ACH payment volume rose 4.2% to 8.5 billion payments. This growth highlights the network’s increasing importance for electronic fund transfers.
What you need to receive ACH payments
Receiving an ACH payment is relatively simple from your perspective as the recipient. Unlike sending funds, which might require setting up a transfer, receiving only requires providing your banking details.
You will need two key pieces of information from your bank account. These are your bank’s routing number and your specific account number. These details identify where the funds should be sent within the banking system.
You can typically find your routing and account numbers on a check or by logging into your online banking portal. Ensure you provide the correct information to the party sending you the payment. Providing incorrect details can lead to delayed or failed transfers.
Two ways to receive ACH payments
From the perspective of someone receiving money via ACH, the transaction falls into one of two categories based on who initiates the action. Understanding this difference clarifies what is required on your end.
The two main types are receiving an ACH Credit or facilitating an ACH Debit for someone to pay you. Both methods result in money being deposited into your account, but the process differs. One is pushed to you, while the other is pulled from the payer with your authorization.
Receiving ACH credit (push)
An ACH Credit transaction is one where the payer initiates the transfer to your account. This is the most common form of receiving funds, often referred to simply as “direct deposit.” Examples include receiving your salary from an employer or a tax refund from the government.
To receive an ACH Credit, the sender (such as your employer) requests your bank’s routing number and account number. They then use this information to instruct their bank to push funds directly into your account. You do not need to take any action beyond providing your banking details.
This method is straightforward for the recipient. Once the sender initiates the payment, the ACH network processes it, and the funds are deposited into your account according to standard processing times. It is a common and trusted method for regular incoming payments.
Receiving ACH debit (pull)
An ACH Debit transaction occurs when you, or a service provider on your behalf, initiates a withdrawal from someone else’s bank account. This is often used by businesses to collect payments from customers or by landlords to collect rent from tenants.
To facilitate receiving an ACH Debit payment, you need authorization from the payer to withdraw funds from their account. This authorization grants permission for future debits up to agreed-upon terms. Authorization is a critical step in the ACH Debit process.
Authorization can be provided in various ways, including signed written forms, online agreements (like checking a box during checkout), or verbal confirmation over the phone.
Once authorized, you or your payment processor can initiate future debit requests to collect payments automatically. This method is commonly used for recurring bills like rent or subscriptions.
How landlords receive rent payments via ACH
For landlords, receiving rent via ACH is often considered the best way to collect rent from tenants. It offers predictability and automation, reducing the hassle of paper checks. Many landlords use specialized platforms to manage this process efficiently.
Rent collection platforms streamline the ACH process for both landlord and tenant. Tenants can set up one-time or recurring payments directly from their bank account using your bank’s routing and account number or, more commonly, by linking their bank account via the platform. This automates the monthly rent payment.
Dedicated property management software often includes integrated online rent collection via ACH. These platforms handle the authorization process and initiate the debit from the tenant’s account on the due date. This provides a clear audit trail and integrates with other features like tracking rent rolls and managing your property management bank account structure.
Platforms like Baselane offer integrated banking, bookkeeping, and rent collection designed for landlords. You can easily set up automated rent collection via ACH through a dedicated tenant portal. This eliminates manual payment tracking and syncs directly with your property finances, helping you manage not only standard annual rent but also specific situations like rent concessions.
Baselane’s features enable reliable, on-time rent payments that are directly deposited into your linked bank accounts. It handles everything from initial payment setup to specific scenarios, such as prorated rent and collecting unpaid rent after a tenant moves out. By integrating rent collection with your banking and bookkeeping, Baselane simplifies financial management and gives you greater clarity and control over your rental income.
Banking Built for Real Estate Businesses
Open unlimited accounts for properties and security deposits with no monthly fees.
Here’s a look at how different platforms support receiving rent via ACH:
| Feature / Platform | Baselane | Avail | Square Invoices | Stripe (via integration) |
|---|---|---|---|---|
| Target Audience | Landlords & Rental Property Owners | Landlords & Rental Property Owners | Small Businesses, including some landlords | Businesses, Developers |
| Primary Focus | Banking & Financial Tools for Landlords | Property Management & Rent Collection | Invoicing & General Payments | Payment Processing & Developer Tools |
| ACH Transaction Fee (Receiving) | Check Baselane Pricing (Often low/free for tenants, potentially low for landlord receiving) | Check Avail Pricing (Often low for tenants) | 1% (min $1) | 0.80% (capped at $5) |
| Recurring Payment Support | Yes (Designed for recurring rent) | Yes (Designed for recurring rent) | Yes (For recurring invoices) | Yes (Via billing/subscription products) |
| Ease of Tenant Setup | Designed to be easy for tenants to pay rent | Designed to be easy for tenants to pay rent | Requires manual invoice setup/sending | Requires integration/custom setup |
| Authorization Handling | Integrated into rent collection process | Integrated into rent collection process | Handled via invoice acceptance | Handled via API integration/checkout flow |
| Integrated Banking | Yes (Directly tied to Baselane bank account) | No (Connects to external bank account) | No (Connects to external bank account) | No (Connects to external bank account) |
| Property Management Features | Yes (Rent tracking, reporting, etc.) | Yes (Leasing, maintenance, etc.) | Limited (Basic invoicing) | None (Pure payment processing) |
Choosing a platform designed for landlords, like Baselane, often simplifies the process. It handles the technical aspects of ACH and provide features specific to property management needs. They are designed to make online rent collection easy and efficient for both you and your tenants.
Note that collecting rent via credit card is also an option, but typically involves higher fees.
How long until you receive the money?
One common question about ACH payments is how quickly the funds become available. Unlike instant payment methods, ACH operates on a batch processing system, which takes time. Standard ACH transfers settle within 1 to 2 business days.
This means that if a payment is initiated on a Monday, it will likely arrive in your account by Tuesday or Wednesday. Business days exclude weekends and federal holidays, which can affect processing times. The exact timing depends on when the payment is submitted and your bank’s processing schedule.
Same Day ACH is an option that allows payments to settle on the same business day. However, this often comes with a higher fee for the initiator or potentially the receiver, depending on the platform used.
Not all banks or platforms support Same Day ACH for all transaction types. Therefore, it’s important to manage expectations regarding payment speed when using ACH.
What are the costs of receiving ACH payments?
A significant advantage of ACH payments is their low cost compared to credit card transactions. Credit card fees can range from 1.5% to 3.5% or more per transaction, plus flat fees. ACH costs are typically much lower.
Typical per-transaction costs for receiving ACH payments are often between $0.01 and $1. Some payment processors might charge a small percentage, but it’s usually capped at a low amount, such as $5 for Stripe.
Dedicated rent collection platforms may bundle ACH fees differently, sometimes making tenant-initiated payments free or very low cost for the tenant, with potentially a small fee for the landlord, depending on the service tier. Always check the pricing structure of any platform you use to receive ACH payments.
The low transaction cost makes ACH an attractive option for receiving larger, recurring payments like rent. Over time, the savings compared to credit card fees can be substantial, contributing to your property’s profitability. This financial efficiency is a key benefit for landlords managing multiple properties.
Pros and cons of receiving ACH payments
Understanding the advantages and disadvantages helps you decide if ACH is the right payment method for your needs. For landlords, the pros often heavily outweigh the cons, especially for recurring rent payments.
Here is a summary of the benefits and challenges:
Pros
- Low Fees: Significantly cheaper per transaction than credit cards.
- Reliability for Recurring Payments: Tenants are less likely to change bank accounts than credit cards, leading to fewer payment failures for regular payments like rent.
- Automation Potential: Easy to set up automated, recurring payments through platforms [9].
- Increased Cash Flow Predictability: Scheduled payments via ACH help forecast income.
- Security: Transfers occur directly between banks, and are generally considered secure.
Cons
- Processing Time: Standard ACH takes 1-2 business days, not instant.
- International Limitations: Primarily for transactions within the United States.
- Not for Point-of-Sale: Not suitable for in-person transactions where immediate payment confirmation is needed.
- Reversals: ACH payments can sometimes be reversed, though specific rules apply.
For managing rental income, the reliability and low cost of ACH make it a preferred method despite the processing time. The benefits align well with the needs of landlords seeking efficiency and cost savings.
Is receiving ACH payments safe?
Yes, receiving ACH payments is generally considered a safe method for transferring funds. The ACH network is operated and regulated by Nacha, which sets strict rules and standards for financial institutions. These rules help protect both senders and receivers.
Transactions occur directly between bank accounts, minimizing the handling of sensitive payment information by multiple parties. Authorization requirements for ACH Debit payments add another layer of security and control. While no system is entirely risk-free, ACH is a widely used and trusted method for electronic fund transfers in the U.S.
What's the difference between ACH and wire transfer?
Both ACH and wire transfers move money electronically between bank accounts, but they operate differently and have different use cases. ACH is a batch-based system processing payments over a period, suitable for lower-value, recurring payments like payroll or rent.
Wire transfers are processed individually and are typically completed much faster, often within the same day or even hours.
However, wire transfers are generally more expensive than ACH transfers. They are usually reserved for high-value, time-sensitive transactions like real estate closings. For regular income streams like rent, ACH is the more cost-effective and practical choice.
Conclusion
Receiving ACH payments into your bank account is a fundamental process for managing electronic income. By understanding what ACH is, how it works, and the simple banking details required, you can effectively receive funds from employers, clients, or tenants.
For landlords, leveraging ACH via dedicated platforms is a highly efficient method for collecting rent payments. Despite the slight delay compared to instant payments, the low cost, reliability, and automation potential of ACH make it an invaluable tool. ‘
Using integrated financial platforms designed for landlords, like Baselane, can streamline the entire process from payment collection to bookkeeping. This helps you take back time, gain clarity and control over your finances, and ultimately grow your rental property business.
FAQs
An ACH payment is an electronic money transfer processed through the Automated Clearing House network in the United States. It allows funds to move directly between bank accounts, commonly used for direct deposit and bill payments.
To receive an ACH payment, you typically need to give the sender your bank's routing number and your specific bank account number. You can find these numbers on a check or through your online banking portal.
Standard ACH payments usually take 1 to 2 business days to settle and for funds to become available in your account. Same Day ACH is faster but may not always be available or could cost more.
Standard ACH payments are not instant. They settle within 1-2 business days due to the batch processing system. While Same Day ACH exists and allows for faster settlement, it is not universally supported for all transaction types and may incur additional fees.
