It is a well-known fact that you can make payments by credit card, cash or check, but what are ACH payments? An ACH (Automated Clearing House) transaction is the process of transferring funds electronically from one bank account to another through a unique routing number, which can be found at the bottom of a paper check.
Businesses who opt to use ACH transfers does not need to deal with paper invoices, paper checks and make physical trips to the banks. This allows businesses to mobilize their accounting staff for more productive tasks. Simultaneously your customers will enjoy an increase in flexibility, no more searching for checkbooks or having to remembering it’s time to pay a monthly bill.
Gives Your Business a Head Start
Not all checking account transactions are created equally, while each and every bank has its own policy on paper checks and electronic ACH transactions, banks will generally process electronic payments first. Time is money for every business, having priority in payment processing gives your business a head start and will definitely increase your company’s competitiveness.
ACH transactions can only be challenged for three reasons: it was not the exact amount authorized, it was processed earlier than the authorized date, or it was not authorized at all. On the other hand, traditional credit cards can be disputed for a much wider variety of reasons. With ach payments, you receive immediate failure notification, which takes the waiting and wondering out of when you will get paid. An ACH transaction also generally means quicker access to your funds. Traditional credit cards do have a higher rate of non-payment and banks will even hold up the funds for days or sometimes weeks.
It is no secret that identity theft is a concern for everyone involved in the transaction. You may have customers who naturally feel uncomfortable providing a bank account number. However, when customers provide the information required to make an ACH payment, it is entered into a totally secure system and encrypted. Even when you need to send a paper check, customers provide the same information required for an ACH payment. The difference is that paper checks exchange multiple hands in the process and run the risk of being left out in an unsecure area. This will not happen when transferring electronically as everything is encrypted.
Transaction Fees are Lower
Asides from cash payment, ACH transactions typically have the lowest fees of any payment method. This is due to the fact that an ACH processor does not involve intermediaries and the funds are moved directly from one bank account to another, allowing the process to be executed at a lower cost.
Recurring Billing Support
You can do just that by setting up recurring billing with ACH payments. As long as the customer has authorized the billing schedule, you can use a payment process program to automatically invoice the customer. The whole process is even automated with auto-invoicing, payment and payment tracking – it is so easy to use.
No paper checks mean less paper consumption, which better for our environment. When you factor in everything that needs to be printed, such as paper invoices, postage and transportation, it’s a no brainer. Going green is good for both the environment and for your business.
Please visit www.ach-pay.com to learn more about how ACH payments can benefit your business.