Setting up an Automated Clearing House, or ACH, payment requires providing the account and routing number for the bank in which the account is held, as well as the account holder's name and type of account, according to Vericheck, a processor of ACH payments. The account holder's signature is also required.
Common uses of ACH include direct deposit, funds transfer between accounts, and online bill payment, according to the Federal Financial Institutions Examination Council. The information required on the ACH form depends on the purpose of the ACH protocol. For one-time payments, only the account number, bank routing number and account holder's name may be required. Recurring payments typically require the frequency of payment and the amount of the payment. Some forms, such as an employer's direct deposit form, may allow the user to enter ACH information for a number of accounts at once, and to specify what percentage of each paycheck should be credited to each account.
Since ACH is a payment protocol, it is very flexible and can be used for a variety of purposes, explains the FFIEC. ACH was initially used primarily for recurring transactions, such as payroll, government benefit payments or mortgage payments. Because ACH payments are cheaper to process than electronic check conversions, as of 2015, use of ACH has expanded markedly to include more one-time transactions.