Which payment method is characterized by automatic transfers from one account to another in the ACH system?

Direct deposit is the payment method characterized by automatic transfers from one account to another within the ACH (Automated Clearing House) system. This method is commonly used for payroll purposes, allowing employers to deposit employees' salaries directly into their bank accounts without the need for paper checks. This not only enhances convenience for both the employer and employee but also promotes efficiency and accuracy in payment processing.

Direct deposit is typically associated with recurring payments and is recognized for its reliability and security, reducing the risks of lost or stolen checks. The specific nature of the ACH system allows for the smooth electronic transfer of funds, making direct deposit a widely adopted practice for salary distribution and various other payments, such as government benefits and tax refunds.

In contrast, direct payment generally refers to one-time payments conducted electronically, while direct mail pertains to the delivery method of correspondence or advertisement. Direct marketing focuses on promotional activities aimed at customers and does not relate directly to payment processes. Thus, direct deposit is uniquely suited to the context of automatic transfers within the ACH framework.