ACH Payments

At Grasshopper, ACH origination enables your business to send and receive payments efficiently, securely and directly through online banking. Whether you're paying vendors, purchasing goods and services, or managing payroll, this guide will walk you through the steps to initiate, approve and track ACH payments with ease. 

Understanding ACH

ACH stands for Automated Clearing House, which is a secure network used by banks to process electronic payments and transfers between accounts. In business banking, ACH enables you to move funds directly and reliably, offering a faster and more cost-effective alternative to checks or wire transfers. With ACH, you can also schedule one-time or recurring payments easily, giving your business greater control over cash flow.

ACH Payments vs. ACH Transfers

It’s important to distinguish between ACH payments and ACH transfers to ensure you use the right type of transaction for your business needs:

• ACH Payments – These allow your business to send money directly to third parties, such as vendors, suppliers, or employees. ACH payments are ideal for making one-time or recurring disbursements outside of your own accounts.
• ACH Transfers – These are “me-to-me” transfers, moving funds between your Grasshopper Bank account and a verified external account at another financial institution. ACH transfers are typically used for managing cash flow between your own accounts rather than paying third parties.

Understanding the distinction ensures your funds reach the intended recipients safely and on schedule. Our digital banking platform supports both one-time and recurring payments for both whether you schedule transactions on specific dates or regular intervals.

How to Make an ACH Payment

When initiating payments, clients have the flexibility to create new recipients or select from their existing wire transfer contact list, with the option to supplement missing ACH banking details as needed.

To make an ACH payment:

1. Login to Online Banking
2. Click Transfer in the navigation bar
3. Select ACH Payment
4. Choose your recipient in the drop-down menu
   • If the recipient is not already listed, select Add a New Recipient and follow the prompts to enter the required ACH banking details.
5. Click Next
6. Select the account you want to use to make your payment
7. Enter the amount of the payment
   • To help ensure your payment amount is within allowed thresholds, click view your ACH Limits and Disclosures.
8. Select Date to open a calendar and choose when you want the payment sent
9. If you would like this to be a recurring payment, select the toggle next to Repeat this Payment.
   • On the screen that appears, you can choose the Frequency in the drop-down menu, with options including Daily, Weekly, Every Two Weeks, 1st and 15th of the month, Monthly, or Yearly.
   • You will also be able to configure when the recurring payment should End, with options to select Never, On a Specific Date, or After a Specific Number of Payments. If you select a specific number of payments, the total amount of the payments is shown.
10. Select Next
11. Select a Transaction Type in the drop-down menu
    • The ACH network requires a specific syntax to process your payment. If you're unsure which one to use, select Learn More About Transaction Types or refer to the list of codes and terms below.
      • SEC Codes (Standard Entry Class codes) are three-letter codes used in the U.S. ACH network. They describe the type of ACH transaction, specifying how the payment information was collected and the purpose of the transaction. These codes are crucial for accurate processing, compliance with authorization requirements, and effective risk management.
        • PPD payments (Prearranged Payments and Deposits) are used for sending money to or taking money from an individual's bank account. Examples include direct deposit for payroll or automatic bill payments.
        • CCD payments (Cash Concentration or Disbursement) are used for money transfers between businesses. Often used for vendor payments or cash pooling.
12. Enter an Entry Description (optional)
    • Entry descriptions are included in the ACH file and viewable by the recipient. Valid entry descriptions include:
      • EXT TRANSFER: For general external transfers, maintaining the current default for familiarity
      • PAYROLL: For employee salary and wage payments
      • PURCHASE: For payments related to goods or services bought
      • BILL PMT: For general bill payments.
      • VENDOR PMT: For payments specifically to vendors or suppliers
      • REFUND: For reimbursements or returns of funds
      • RENT: For rental payments
      • LOAN PMT: For loan repayments
      • DIVIDEND: For dividend distributions
      • COMMISSION: For commission payments
      • SETTLEMENT: For the settlement of invoices or agreements
13. Enter any Internal Details to add an additional note (optional)
    • Internal Details are not viewable by the recipient.
14. Verify your identity by entering a two-faction authentication (2FA) code.
    1. Select your verification method
    2. Click Continue
    3. Enter the code that appears on your trusted device
15. Review your payment details
16. Select Make Payment.

After submitting your payment, a receipt will appear on the screen. You will also receive an email confirmation when the ACH payment has been processed.

ACH Dual Approvals

Dual Approvals are a security control that requires two separate individuals to authorize an ACH or Wire payment. This feature is especially useful for businesses with multiple banking users, providing an extra layer of oversight by ensuring a second authorized party reviews and confirms payments before they are sent.

Enabling Dual Approvals 

Account holders and admin users can easily enable dual approvals for their organization in online banking. To enable dual approvals:

1. Login to Online Banking
2. Go to profile menu in the navigation bar
3. Click Settings
4. Client Security
5. Navigate to the Dual Approvals section
6. Turn the ACH Payments toggle on

Submit an ACH Payment for Approval

With Dual Approvals enabled, any ACH payment submitted by a user is sent for approval to all users who have payment approval permissions in both the web and mobile apps. The user who initiates the payment will receive an on-screen confirmation that the payment was submitted for approval. All users with permissions to approve ACH payments will receive an email notification when a payment is submitted for approval, as well as an on-screen message once they log in to online banking or our mobile app.

Dual Approval Email Notifications

We send the following email notifications for Dual Approvals:

• When an ACH payment is approved or rejected, the user who initiated the payment receives an email notification.
• When an ACH payment is pending approval, all users with permission to approve ACH payments receive email notifications.
• When a payment expires without approval, the user who initiated the payment and all users who are permitted to approve ACH payments receive email notifications.

Approve or Reject ACH Payments 

To review, approve or reject ACH payments:

1. Login to Online Banking
2. Click Tools in the navigation bar
3. Click Dual Approvals in the drop-down menu
   • You can also select Review Now from the on-screen message upon logging in or click the approval link provided in the email that was sent when a payment was submitted.
4. Review your Pending Approvals
   • The Pending Approvals tab is shown by default, indicating the number of pending approvals.
   • Pending approvals within 24 hours of the scheduled payment date display an info tip, indicating that the payment must be approved soon.
5. Click View next to the payment you'd like to review
   • You can also check the box next to the payment you'd like to review, approve or reject. If there are multiple payments in the list, you can check the top box to Select All payments and approve or reject in bulk.
6. Select Approve or Reject.

View Approval History

To view past approvals and their statuses:

1. Click Tools in the navigation bar
2. Click Dual Approvals in the drop-down menu
3. Select the Approval History tab.

Possible statuses include: approved, rejected and expired. Expired status is assigned when a single scheduled ACH payment is not approved or rejected by the time the scheduled payment processor runs on the morning of the scheduled date.

Support

For questions or concerns about ACH payments, you contact Client Services Monday-Friday 9am-9pm ET by dialing 888.895.9685 or emailing support@grasshopper.bank.

For your convenience, we also offer support via secure message or chat.