Is there any governance in place allowing us (the payor) to mandate ACH payments to suppliers and vendors? In Massachusetts, we can now mandate direct deposit of paychecks, and I'm looking for resources addressing ACH policy rules.


In the U.S., it is a business decision for your organization whether to mandate ACH payments to vendors.  There are laws in many states prohibiting mandating direct deposit (ACH) of payroll for employees, because not all individuals maintain a personal bank account, and most state governments do not allow businesses to force employees in the matter.

However, regarding payments between companies, there are no such laws. You decide if you want to try to mandate ACH as a payment method—but, of course, there are at least two parties to a transaction and the vendor may have a say. It often depends on which company has leverage in the relationship.  Many companies are working to convert their vendors to ACH or card payment from checks. Strategies include faster payment by those electronic means, versus longer terms if they want to be paid by check.

On the other hand, there is no government mandate that vendors must accept electronic payment, except where they deal with the government.

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