The Automatic clearing house is a simplified electronic funds transfer process from one account to another account. The process is composed of two methods: ACH Debit and ACH Credit, each method being unique in its own way.

Nature of transactions: ACH credit involves the depositing (cash inflows) of money into an account whereas ACH debit involves money withdrawal from an account for purposes such as payment of taxes and employer withholdings- ACH debit is basically an outward payment method from an account to another.

Authorization for funds transactions: In the ACH debit, department banks enjoy the authorization for funds while in the ACH credit only the financial institutions have the authorization.

Fees charged for the services: Transacting in the ACH credit attracts fee charged by the service provider directly on the account whereas in ACH debit transactions the individual or organization has to pay some fee for the services.

Approval for transacting: ACH debit transactions are usually sensitive to the users and they are usually initiated by prior written authority of the account holder in which he declares the intention to give up control over the issuance of funds. ACH credit on the other hand does not require prior authorization of the account holder.