Accredited ACH Professional (AAP) Practice Exam

What type of transaction typically requires an ACH debit?

1. Direct deposits to employee accounts

2. Bill payments

3. Cash withdrawals from ATMs

4. Credit card transactions

The correct answer is: Bill payments

The choice referring to bill payments is correct because ACH debits are commonly utilized for this purpose. In an ACH debit transaction, a consumer authorizes a business or organization to pull funds directly from their bank account, which is the fundamental process behind paying bills, such as utility bills or loan payments. This method is efficient and convenient for both the payer and the payee, allowing for automatic or scheduled withdrawals. In contrast, direct deposits to employee accounts typically involve ACH credits, where funds are deposited into accounts rather than being debited. Cash withdrawals from ATMs are direct transactions that do not utilize ACH; they involve the immediate transfer of funds between consumer accounts through the ATM network. Similarly, credit card transactions involve a different payment processing system, where the credit card network handles the transfer of funds rather than using the ACH system.