ACH Credit vs. ACH Debit: What’s the Difference?
A credit means money goes into your account. A debit means money goes out. Simple—until you start setting up ACH payments for your business and run into terms like ACH credit and ACH debit. What do they actually mean, and when should you use each? Let’s break it down.
What is an ACH credit transaction?
An ACH credit happens when funds are pushed (deposited) into your bank account. Any time someone sends you money through the ACH network—payroll, a customer paying an invoice from their bank, or a tax refund—that’s an ACH credit.
Examples (receiver point of view):
· Your customer sends an invoice payment from their bank (you receive an ACH credit).
· Your paycheck lands as direct deposit.
· You receive a tax refund via ACH credit.
What is an ACH debit transaction?
An ACH debit happens when funds are pulled (withdrawn) from a bank account with prior authorization. Business (the biller) requests funds; the customer’s bank transfers the money through the ACH system.
Examples (payer point of view):
· You sign an authorization with your mobile carrier; each month they pull your bill via ACH debit.
· A gym, SaaS app, or utility pulls an agreed amount on a schedule.
Key differences at a glance
1. Who initiates it:
· Credit = payer pushes funds
· Debit = payee pulls funds (with authorization)
2. Direction of money:
· Credit = money to the recipient
· Debit = money from the payer
3. Typical purpose:
· Credit = payroll, refunds, one-off bill pay from a bank portal
· Debit = subscriptions, installments, invoices you want to autopay
4. How it’s started:
· Credit = payer initiates from their bank
· Debit = payee initiates after getting authorization (online, phone, signed form)
5. Who benefits most:
· Credit = payers who want timing control
· Debit = businesses that want predictable, automated collections
ACH “SEC” codes you’ll see (by use case)
Common ACH credit codes
· CCD (Corporate Credit or Debit): Business paying a business (e.g., supplier).
· CTX (Corporate Trade Exchange): Business/government payments with addenda.
· CIE (Customer Initiated Entry): Consumer uses their bank to pay a biller.
· PPD (Prearranged Payment & Deposit): Direct deposit, benefits.
· IAT (International ACH Transaction): Cross-border entries.
· WEB (Internet-Initiated Entry): Consumer authorizes an online payment to a business.
· MTE (Machine Transfer Entry): ATM-originated credits.
· POS / SHR: Network credits (refunds, shared ATM network credits).
Common ACH debit codes
· PPD: Recurring debits from a consumer (utilities, memberships).
· WEB: Consumer authorizes an online debit (one-time or recurring).
· TEL: Telephone authorization for a debit.
· ARC: Mailed check converted to ACH debit.
· BOC: In-person check converted in the back office.
· POP: Check converted at the point of purchase.
· RCK: Re-presented check (retry after NSF).
· TRC/TRX: Truncated check entries.
· POS / MTE / SHR: Network debits (debit-card/ATM networks).
Tip: Your processor or bank will map your flow to the right SEC code automatically once you collect the correct authorization.
When businesses use ACH credits vs. ACH debits
· Use ACH debits if you want to pull funds (with consent) for:
· SaaS & memberships: automated subscriptions and dues.
· Installments & financing: scheduled payment plans.
· Professional services: retainers and recurring invoices at lower cost than cards.
Use ACH credits if you want to push funds for:
· Vendor payments from your online banking.
· Payroll & reimbursements.
· Refunds or one-time payouts where you control timing.
Process ACH the easy way with Liftoff
If you’re setting up ACH for your business, Liftoff Platform provides secure ACH solutions alongside Same-Day ACH and real-time payments (RTP)—so you can choose speed vs. cost per transaction. Learn more about our ACH payment solution, recurring billing for subscriptions/installments, and real-time payments for instant transfers.
Liftoff also offers tools that pair naturally with ACH collections—like Subscription Manager to reduce churn and manage recurring charges, plus Credit Builder and Rent Reporting to help customers strengthen their credit profiles (a win for on-time payments).
Want a primer for your team? See our beginner articles on ACH payment processing and what ACH stands for.
FAQs
Why was money debited from my account through ACH?
An ACH debit means a company you previously authorized pulled funds (e.g., bills, subscriptions, loan payments). If you don’t recognize it, contact your bank immediately and the merchant to investigate possible error or fraud.
How can I stop an ACH debit?
Ask your bank for a stop-payment order (usually requires advance notice and may include a fee) and notify the biller to cancel authorizations. If it was unauthorized, report it at once— banks have strict timelines to help you dispute.
Can ACH debits or credits be reversed?
Yes—within specific NACHA rules and time limits for errors, duplicates, or fraud. Act fast: contact your bank/processor as soon as you notice a problem.
Why did I receive an ACH credit?
Someone pushed money to you: payroll, tax refund, reimbursement, or an invoice payment. Your bank statement usually lists the sender.
How do I find where an ACH credit came from?
Check the description line for a company name or trace ID. If unclear, your bank can help identify the sender. Treat unknown credits cautiously and alert your bank if it looks suspicious.
How does direct deposit work?
Direct deposit is an ACH credit. The payer’s bank (ODFI) sends the entry through the ACH network; your bank (RDFI) receives it and credits your account.
Put it into practice with Liftoff
· Collect payments: Use ACH debits for subscriptions, dues, and installment plans with Liftoff Recurring Payments.
· Disburse funds: Push refunds or payouts with ACH—or send money in seconds with RTP.
· Reduce churn: Track and manage recurring charges with Subscription Manager to keep accounts current.
Friendly disclaimer
This guide is for general education. ACH rules change and bank policies vary—always confirm requirements with your bank or payment partner.