Accept ACH Payments: How to Set Up, Compliance & Issues
TL;DR - Summary
- How to accept ACH payments? - Businesses and freelancers can accept ACH payments through a US bank account or a virtual US account provided by a payment service.
- Is ACH available in India? - ACH is not directly available for transfers to Indian bank accounts, but Indian users can receive ACH payments through a US bank or virtual US account and transfer the funds to India.
- What are ACH payments for freelancers? - ACH payments for freelancers provide a low-cost way to receive USD payments from US clients and transfer the funds to an Indian bank account.
- Can you accept ACH payments instantly? - No. ACH payments are not typically instant and may take time to process and settle.
What does Accepting ACH Payments Mean?
Accepting ACH payments means allowing customers or clients in the US to pay you electronically through the Automated Clearing House (ACH) network. It is commonly used for receiving payments for services, invoices, subscriptions, and other business transactions.
For Indian freelancers and exporters, ACH can be used to receive payments from US-based clients without relying on traditional international wire transfers.
How To Accept ACH Payments from US Clients?
Indian exporters and freelancers can accept ACH payments by either opening a US bank account or using a virtual US account through a cross-border payment platform. A virtual US account is generally a simpler and more cost-effective option.
Method 1: US Bank Account with Physical Card
How it works: Create a US company (such as a US LLC) or use your existing US presence to open a normal bank account with a bank such as Chase or Mercury. You get paid into this account directly, as you would pay any other US vendor.
Pros: Full control of your USD funds within the US banking system.
Cons: You need a US company or Social Security Number (SSN)/Individual Taxpayer Identification Number (ITIN), ongoing compliance work, and you'll still need to transfer the money to India separately, following RBI rules.
Method 2: Virtual US Receiving Account (Preferred)
How it works: You sign up with a cross-border payment platform like Skydo. These platforms give you a virtual US bank account, with a real routing and account number, in your business's name. Your client pays this account by normal domestic ACH. The platform then exchanges the money and deposits it into your Indian bank account in INR, making it one of the simplest ways to receive USD payments in India.
Pros: No US company or SSN required, low, flat fees instead of a percentage cut, automatic compliance paperwork (like your FIRC), INR payout within 24-48 hrs.
Cons: You don't have full control of your USD funds within the US banking system.
Most freelancers find Method 2 much easier, and it avoids most of the paperwork and cost of Method 1.
How to Set Up to Accept ACH Payments in India?
Indian businesses can accept ACH payments by setting up a virtual US bank account through a cross-border payment platform. This provides US clients with local account details to send ACH payments, while the funds can be transferred to the business’s Indian bank account. Setting up a virtual account is a simpler and faster way to receive ACH payments from US clients.
How to Set Up Your Account
- Create a profile: Sign up on Skydo and upload your business PAN, GSTIN or Corporate Identification Number (CIN), and personal KYC documents (PAN and Aadhaar).
- Connect your Indian bank: Add your Indian bank details and complete a small penny-drop verification to confirm the account.
- Get your US account details: Once verified, you'll get a virtual US bank account in your business's name with a routing number, account number, and bank address.
Requesting and Receiving Payment
- Post your virtual US details: Give your client the virtual US routing number and account number, not your Indian bank account details.
- Client pays via domestic ACH: They pay through their normal US banking system, avoiding expensive international wire fees.
- You get paid in INR: The money is converted at live market rates and paid to your Indian bank account, usually within 24-48 hours.
To your US client, this entire process is perfectly normal. They are just paying a US account through their regular bank portal. On your side, it removes the need for a US entity, SSN, and manual currency conversion.
Don't choose a payment method on the fee shown upfront alone. Look at the full cost of receiving the money: the FX markup, intermediary charges, payout fees, and even the cost of getting your foreign-remittance documents. A cheaper-looking ACH option can easily cost you more once all of that is added up.
What Does an Indian Exporter or Freelancer Need to Share to Accept ACH Payments?
An Indian exporter or freelancer needs to share four details to get paid via ACH: routing number, account number, account type, and the exact recipient name, and should never share OTPs, login credentials, or ID documents.
What to Share
- Routing number (ABA number): A nine-digit number used to identify the US bank associated with the virtual account and route the ACH payment correctly.
- Account number: A unique number assigned to the business’s virtual US account for identifying and receiving payments.
- Account type: Specifies whether the account is a checking or savings account. Virtual US accounts are generally set up as checking accounts for receiving business payments.
- Recipient name: The name provided to the sender should exactly match the business name registered with the virtual account to avoid payment processing issues.
How to Share Safely
Send these details on an invoice, client portal, or secure link, never on screenshots, WhatsApp, or group chats.
What Not to Share
- One-time passwords (OTPs) from your bank or platform
- Bank login credentials
- "Verification codes" sent by email or SMS
- ID documents (PAN, Aadhaar), unless the request is verified and necessary
What Are the Compliance Rules for Accepting ACH Payments in India?
Indian businesses accepting ACH payments must comply with applicable Indian regulations, including FEMA, RBI and GST requirements, as well as relevant US ACH rules under Nacha.
Indian Regulatory Requirements
- FEMA compliance: Foreign payments received by an Indian business must be processed through an authorised dealer (AD) bank and handled in accordance with applicable FEMA requirements. For export transactions, the AD bank is responsible for ensuring compliance with the relevant export and foreign-exchange rules and for recording the receipt appropriately.
- eFIRA/FIRC: An Electronic Foreign Inward Remittance Certificate (eFIRA), also commonly referred to as an FIRC, provides documentation of foreign inward remittances. The authorised dealer bank can issue the relevant remittance certificate or advice based on the nature of the transaction and its documentation requirements. Businesses should retain this evidence as part of their export and foreign-exchange records.
- KYC and AML: Payment platforms, banks and virtual account providers generally require Know Your Customer (KYC) checks and may conduct Anti-Money Laundering (AML) screening before allowing a business to receive cross-border payments. These checks help verify the identity and nature of the business and support regulatory compliance.
- GST documentation: Export transactions need to be supported by appropriate invoices and documentation. Under the GST regime, exports are generally treated as zero-rated supplies, subject to the applicable conditions. Businesses should ensure that their export invoices and inward remittance records are consistent so that the transaction can be properly reported and the relevant GST treatment can be established.
US ACH Network Requirements
Although the recipient is based in India, the payment can still be subject to Nacha Operating Rules when it originates through the US ACH Network. These rules primarily apply to the parties and payment providers originating and processing the ACH transaction.
- Account validation: Nacha requires account validation for certain WEB debit transactions. For a first-time use of a consumer account, or when the account number changes, the Originator must use a commercially reasonable method to confirm that the account is valid and can accept ACH entries. This requirement is specific to covered WEB debits and does not apply to every ACH payment.
- Return-rate requirements: Nacha establishes return-rate levels for ACH debit activity to help control fraud and payment risk. The unauthorised return-rate threshold is 0.5%, while the overall return-rate level is 15% for applicable debit entries. These thresholds are relevant to ACH Originators and Third-Party Senders rather than being a general requirement imposed on Indian businesses simply because they receive ACH payments.
- Standardised transaction descriptions: Nacha rules also prescribe certain Company Entry Descriptions for specific types of ACH transactions. For example, from 20 March 2026, the description “PURCHASE” is required for certain consumer e-commerce ACH debits involving online purchases of tangible goods. This requirement does not apply to every ACH transaction or to B2B payments for services.
How Skydo Lets You Accept ACH Payments from US Clients
Skydo helps Indian exporters and freelancers receive US ACH payments by providing them with virtual USD accounts complete with real US routing and account numbers.
A US client uses those details to pay locally through ACH instead of dealing with an international wire on their end. The whole thing runs simply: set up a Skydo account, get the virtual USD details, share them with the client, the client pays through ACH, and Skydo settles the equivalent into the Indian bank account.
Every payment comes with an automatic FIRA, settlement lands within one working day, there's no monthly fee, and onboarding runs entirely online. eBRC and EDPMS closure assistance is there too, for exporters who need it.
Can I accept ACH payments instantly from a US client?
No. ACH usually takes 1- 3 business days. There is same-day ACH, but it costs more and still isn't instant, so you can't truly accept ACH payments instantly. INR payout will be available within 24–48 hours of ACH clearing, with a virtual US account.
Is ACH available in India?
How can I accept ACH payments without a US bank account?
Is it safe to accept ACH payments through third-party platforms?
Do I need GST documentation when receiving ACH payments from a US client?
