ACH debit and ACH credit are two types of bank-to-bank transfers that can be processed through the Automated Clearing House (ACH) network. The key difference between ACH debit and ACH credit transactions for small businesses is who initiates the transaction: the merchant for ACH debit and the customer for ACH credit.
An ACH debit transaction is initiated by the merchant, who authorizes the transfer of funds from the customer’s bank account to the merchant’s bank account (upon getting the customer’s authorization). On the other hand, an ACH credit transaction is initiated by the customer, who authorizes the transfer of funds from their bank account to the merchant’s bank account.