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Expanding into the US market means you will need to understand how banking works there. One element you'll soon encounter is the ACH routing number—a core part of the domestic US bank transfer system.
If your business accepts payments from American customers or settles with US-based partners or suppliers, the nine-digit ACH code will plays a critical role in making sure you pay and get paid in a prompt and timely manner.
What is an ACH routing number?
In the simplest terms an ACH routing number is a unique identifier for each financial institution in the US banking system. It's used for transfers processed through the Automated Clearing House (ACH), which handles everything from payroll and direct deposits to recurring payments and supplier payouts.
In short, it's how US banks know where to send the money.
Why ACH matters to global businesses
If you're billing US customers, issuing refunds, or paying local vendors, ACH transfers often make the most sense. They're reliable, widely accepted, and generally more cost-effective than cards or wires.
ACH is especially suited for:
- Subscription payments and billing cycles
- Payroll disbursements
- Marketplace settlements
- Supplier payments within the US
Many US consumers prefer ACH for recurring payments—utilities, memberships, or digital services—because of its familiarity and predictability.
ACH vs. SWIFT vs. wire transfers: What's the difference?
These terms often get mixed up. Here's how to tell them apart:
|
Code Type |
Use Case |
Coverage |
|
ACH Routing Number |
US domestic transfers via ACH network |
U.S. only |
|
Wire Routing Number |
Same-day domestic U.S. wires |
U.S. only |
|
SWIFT/BIC Code |
Cross-border transfers between countries |
Global |
If your payment strategy includes both US and international flows, you'll likely work with multiple code formats. Routing numbers for domestic US activity. SWIFT for global.
How the ACH routing number is structured
The routing number isn't random. Each section has a purpose:
- First 4 digits: Identify the Federal Reserve Bank that processes the payment
- Next 4 digits: Point to the individual bank or credit union
- Last digit: A check sum that validates the entire number
While you won't need to memorise this, it helps to understand why verification tools and payment gateways flag certain errors—many issues come from incorrect routing formats.
Where to find an ACH routing number
When requesting ACH details from a US client or supplier, you can point them to:
- Cheques: It's the 9-digit number on the bottom-left
- Online banking portals: Most banks display it under account info
- Customer service: Banks can confirm routing numbers upon request
If your business collects bank information during onboarding, make sure the form distinguishes between ACH and wire routing numbers. They can differ, even at the same bank.
Avoid these common mistakes
Many merchants entering the US market for the first time run into similar issues:
- Using a wire routing number for ACH transfers (and vice versa)
- Accepting bank details without validating format or authenticity
- Assuming that all U.S. bank codes function internationally
Routing number validation through APIs can help reduce failed payments and support better user experiences at checkout or during payouts.
When ACH is the right fit
ACH transfers are ideal when:
- You need to handle recurring payments (e.g., subscriptions or instalment plans)
- You're making high-volume, low-value transactions
- You want to avoid credit card fees or wire transfer costs
For example, SaaS platforms often rely on ACH for monthly billing. Marketplaces use ACH for merchant settlements. Payroll providers use it to pay contractors and staff.
How it supports US market entry
Offering U.S.-based ACH payments supports localisation. American customers are accustomed to ACH as a payment method, and many B2B partners expect it.
Benefits for global merchants include:
- Lower transaction costs vs. cards or wires
- Better acceptance and trust from U.S. customers
- Faster reconciliation for domestic disbursements
- Easier integration with platforms that already support ACH
How ACH works behind the scenes
ACH isn't a real-time system. Transfers are batched and cleared in windows, typically once or twice daily. You'll need to account for a 1–2 business day delay between initiation and settlement.
Keep this in mind for:
- Refund policies
- Invoice due dates
- Cash flow planning
Some platforms offer next-day or same-day ACH, but this often requires additional setup and fees.
The role of technology in ACH payments
Modern payment platforms can take care of the complexity behind ACH. Key capabilities include:
- Real-time routing number verification
- Automated retries on failed deductions
- API-based settlement reconciliation
- Tokenisation of bank account data for security
By integrating ACH through a digital payments provider, you can avoid manual processes and reduce the chance of error.
In short
ACH routing numbers might seem like a small detail, but they underpin a large portion of US domestic commerce. If you're expanding into the US, understanding how they work—where to find them, how to use them, and how to validate them—helps you avoid missteps and improve your payment operations.
Whether you're collecting subscriptions, paying suppliers, or refunding customers, ACH can play a central role in how you move money within the U.S.
