ACH Pull

Definition of ACH Pull

An ACH pull is a type of ACH transaction where funds are “pulled” from the payer’s bank account by the payee. In this case, the payee initiates the transaction and, with prior authorization from the payer, withdraws the designated funds from the payer’s account.

How It Works

  1. Authorization: Initially, the payer grants permission to the payee to pull funds from their account. This often involves setting up a mandate or agreement.
  2. Initiation: When a payment is due, the payee initiates the transaction, requesting the funds from the payer’s account.
  3. Processing: The payee’s bank processes this request and sends it through the ACH network.
  4. Transfer: The funds are transferred from the payer’s bank account to the payee’s account.
  5. Completion: The payee receives the funds, and the payer’s account balance is reduced by the transaction amount.

The “Pull” in ACH Pull

  • The term “pull” indicates that the transaction is initiated by the recipient of the funds. The recipient has the authorization to withdraw the agreed amount from the sender’s account.

Users of ACH Pull

  • Businesses: Commonly used for recurring billing, such as subscription services or utility payments.
  • Individuals: For automatic bill payments, like mortgage or credit card payments.
  • Financial Institutions: For loan repayments or investment contributions.

Pros and Cons


  1. Convenience for Payee: Automates the collection process, ensuring timely payments.
  2. Efficient for Recurring Payments: Ideal for regular, fixed payments like subscriptions.
  3. Reduced Payment Delays: Minimizes the risk of late payments from customers.


  1. Less Control for Payer: Once authorized, the payer has limited control over individual transactions.
  2. Overdraft Risk: If the payer’s account lacks sufficient funds, it may lead to overdraft fees.
  3. Potential for Errors or Fraud: Incorrect amounts or unauthorized pulls can occur, requiring vigilance.

Examples of ACH Pull Usage

  1. Utility Bills: A homeowner sets up an ACH pull arrangement with their utility company. Each month, the utility company automatically pulls the bill amount from the homeowner’s bank account.
  2. Subscription Services: A consumer subscribes to a streaming service. The service provider pulls the monthly subscription fee from the consumer’s bank account on a set date.

In these examples, ACH pull transactions simplify the payment process for regular, ongoing financial commitments, benefiting both the payee and the payer in terms of convenience and reliability.

This page was last updated on December 24, 2023.

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