An ACH payment is simply a transfer of funds from one bank to another. What this means regarding the earnest money process is that it eliminates the need for a paper check. By making an earnest money payment electronically instead of by paper check, the earnest money can be transferred from the buyer’s bank to the bank account receiving the earnest money.
An ACH payment means agents don’t need to worry about the inconvenience, cost and security issues of running a paper earnest money check from party to party. This also keeps the buyer’s sensitive bank account information out of the hands of unknown people in the paper check depositing process. Plus, everyone involved in the transaction knows the exact status of the earnest money payment which is virtually impossible and time-consuming with a paper check. An ACH payment is not a wire transfer as is sometimes used in real estate transaction. But for electronic earnest money payments, the convenience and security make it the preferred method of payment over an old-fashioned paper check.