For businesses, collecting payments from customers can come in a variety of ways, but some ways are definitely better than others. For many businesses, ACH is a processing method worth looking into.
What is ACH?
ACH payments are considered to be electronic payments. Funds are moved from your customer’s account into your business account, generally the transaction is completed over two to three business days. You have probably already seen ACH in action if you are familiar with ‘e-checks’ or monthly recurring billings from a checking account.
The term ACH is derived from the Automated Clearing House network. They handle the logistics of payments of this nature. Banks coordinate to move money from one banking institution to another. Most of this activity is invisible to corporations and general consumers.
In order to accept payments via ACH, companies need to use a merchant account that can accept ACH payments – most of can. Customers provide their relevant checking account information (account number and routing number), and that data is used to create the payment.
What are the Benefits of ACH?
Why should business process payments with ACH? The primary benefit of using an ACH payment processor is that it is cost effective, along with the other benefits that arise with other electronic payment methods. Let’s take a look at some of these positive attributes at hand:
- Low Fees
ACH allows for a relatively inexpensive way to accept payments. Although costs exist and vary from provider to provider, and depend on whether or not you also pay a recurring fee, but in comparison to credit cards, ACH processing almost always costs less and these savings can compound and prove to be a sizeable amount over time.
- Easy for Businesses
There is little or no other action required from the business once a payment is set up. Customers might even be able to enter their own payment information, inclusive of the recurring payments, which continue to come in electronically month after month. ACH eliminates the unnecessary process of opening mail and applying payments to the right account, and depositing checks into the bank.
- Variety of Ways to Accept Payments
Organizations can take payments by ACH in a number of ways. Customers provide checking account information online, over the phone with a customer service representative, or on a more traditional paper form. The payment can take place once somebody has input that information into a computer.
- Easy for Customers
Customers also enjoy working with companies that take ACH payments. Instead of receiving a bill every month, drafting a check, securing a stamp, and getting the bill into the mail timely, customers are able to automate their payments. Unlike credit card information, which needs to be updated and managed as cards expire or account numbers change, checking account numbers rarely need to be revisited.
- Few Errors
ACH payments can keep errors at a minimum. Payment systems attempt to verify that accounts are set up properly, and you only need to set it up once – after that, any recurring payments will be made successfully, and there is no other monthly opportunity for a mistake to be made.
- Safe and Secure
Payment systems are absolutely safe to use and they minimize fraud – although businesses should always monitor their accounts much more closely than consumers do due to increased risk with corporate accounts. With any reputable payment-processing provider, information is encrypted so it is hard for thieves to access your account information. In addition, there are no checks sitting around to get “looked at”.
How to Start Using ACH Processing?
If your business is ready to take payments by ACH, it is just a matter of signing up with a payment processor. Visit www.ach-pay.com to learn more about ACH processing.