Automated Clearing House (ACH) transfers are a common method of moving funds for businesses and individuals. Same Day ACH is a faster version of the traditional ACH transfer and is designed to speed up bank payments. While standard ACH transfers can take one to four business days, Same Day ACH can verify and settle funds within the same business day.

Same Day ACH transfers have been in use since 2016. And while they’re not technically instant, they are the fastest way of sending ACH funds. They still rely on the ACH network but use real-time risk assessment and balance verification to reduce the chance of failed payments. This type of transfer is often used for payroll, account funding, or settling bills—situations when faster access to funds matters most.

Below, we’ll explain how these ACH payments work, what they’re used for, and how Stripe can support them.

What’s in this article?

• How does instant ACH work?
  
• Why do businesses use instant ACH instead of credit cards or wire transfers?
  
• What are the potential challenges of instant ACH?
  
• How does Stripe support fast ACH payments?
  

How does instant ACH work?

Although it’s not instantaneous, Same Day ACH speeds up traditional bank transfers by checking balances in real time and settling payments faster—sometimes within hours. It’s still an ACH transfer, but it minimizes wait time by layering in real-time verification and risk assessment. Here’s how it works:

• When a customer makes a payment, the system instantly confirms they have enough funds in their account. This happens through direct bank connections that pull live balance info.

• The system scans for warning signs, such as unusual spending patterns and past failed transactions, to prevent failed payments and fraud.

• Regular ACH payments are batch-processed and take a day or more, but Same Day ACH works with banks and payment networks that support same-day transfers.

• Once the payment clears these checks, the recipient gets access to the funds much faster. In some cases, payment providers will front the money while the transfer finalizes in the background.

Why do businesses use instant ACH instead of credit cards or wire transfers?

Businesses use Same Day ACH instead of credit cards or wire transfers because it’s less expensive than cards, faster than standard ACH, and more flexible than wire transfers. Here’s why they make the switch:

• Lower costs, especially for high-value transactions: Credit card processing fees can add up fast. ACH transfers offer a flat or very low per-transaction fee, which means they’re a good choice for big-ticket payments such as payroll, vendor payouts, and loan disbursements.

• Speed without the complexity of wire transfers: Traditional ACH transfers are slow, and wire transfers—while fast—are expensive and require more manual effort. Wire transfers also aren’t practical for recurring transactions. Same Day ACH moves money much faster than standard ACH and without the overhead needed for wire transfers.

• Better liquidity and cash flow control: When businesses use credit cards, they have to wait on batch settlements, and wire transfers don’t always sync well with automated payouts. Same Day ACH gives companies quicker access to funds while still enabling automation.

• Less payment risk than credit cards: Card payments can be reversed with chargebacks so there’s a risk of chargeback fraud. Same Day ACH payments are more secure because once they clear, they’re harder to dispute or reverse.

• Stronger bank integration: Businesses that rely on direct bank relationships—such as fintechs, payroll companies, lenders, and marketplaces—use Same Day ACH to move money efficiently within the banking system without the constraints of card networks or wire transfers.

What are the potential challenges of instant ACH?

Same Day ACH is a good alternative to credit cards and wire transfers, but it does have drawbacks. Here’s where businesses can run into trouble:

• Not every bank participates: Unlike standard ACH, which works almost everywhere, Same Day ACH depends on banks that support real-time balance checks and faster clearing. If a customer’s bank doesn’t support these features, the payment might fall back to regular ACH, which is slower.

• Funds can disappear: Just because there are enough funds in an account when the system checks it doesn’t mean the money will still be there when the payment clears. In contrast to credit cards, where funds are held the moment a charge is authorized, ACH transactions don’t lock in the amount so customers can move money out before the transfer completes.

• It can be susceptible to fraud: While Same Day ACH is safer from chargebacks than credit cards, it’s not foolproof. Bad actors can still exploit timing gaps, use someone else’s account, or dispute a transaction after the fact. Certain industries (e.g., lending, crypto, high-risk payments) need to be extra careful.

• Speed isn’t always guaranteed: Some banks process Same Day ACH in hours, but others might take a full business day. This unpredictability can hurt cash flow, especially for businesses that rely on precise timing.

• Customers might need convincing: Credit cards are familiar, and asking customers to link a bank account for Same Day ACH isn’t always an easy sell. If customers hesitate to connect their accounts or don’t have complete confidence in the process, businesses can see drop-offs during the payment process.

• It comes with rules: Same Day ACH still operates within the broader ACH system, which means businesses have to follow the rules of the National Automated Clearing House Association (Nacha). If you’re in a regulated space (e.g.,lending, financial services), there could be additional obstacles.

How does Stripe support fast ACH payments?

Stripe makes ACH payments faster, easier to verify, and more reliable for companies that want to move beyond credit cards. Here’s how it does so:

• Quick turnaround on microdeposits: Normally, verifying a bank account for ACH takes a day or two with small test deposits. Stripe allows businesses to skip this step by using Plaid to confirm accounts instantly so customers can link their banks and pay without needing to wait.

• Faster fund transfers: Stripe pushes ACH payments through the Same Day ACH network whenever possible. Some payments still take longer depending on the bank, but overall, they’re much faster than standard ACH transfers.

• Payment before the transfer clears: In some cases, Stripe fronts the money so businesses don’t have to wait for the full ACH process to finish before they can access their funds. This helps with cash flow and mitigates the unpredictability of ACH timing.

• Built-in fraud and payment failure protection: Stripe automatically checks ACH transactions for fraud and insufficient funds. If a payment bounces, Stripe retries it and provides details on why it failed so businesses don’t have to track down issues manually.

• Lower fees, especially for large transactions: Credit cards take a cut of every transaction, which adds up fast. Stripe’s ACH pricing is lower than its credit card processing fees, which makes it a better option for businesses that handle large transfers or recurring payments.

• Integration with the rest of Stripe: Same Day ACH integrates with Stripe’s invoicing, subscription billing, and payout services, so businesses don’t have to add on a separate solution to accept bank payments.