One would think that because of their popularity, businesses would be satisfied with debit and credit payment systems. However, businesses are increasingly exploring alternative avenues for payment processing. The question is, why?
The answer: high processing costs. Traditional debit and credit card payments carry with them a high fee that businesses would rather avoid. Automated Clearing House (ACH) transfer is a smarter alternative – and here’s why.
- Lower Transaction Fees
Checks and credit cards carry higher costs than ACH transfers on average because of the administrative procedures. These procedures include authorization, payment initiation, printing, signing, mailing costs, and time. This makes ACH transfers far more appealing – funds are transferred between two banks through a clearing house, which lowers transaction costs.
- Faster Processing Time
With ACH payments , businesses will often experience improved workflow efficiency, quicker cash access, and increased payment flexibility. This is all due to the quicker settling time of ACH compared to cheque payments – a happy medium between cheque and credit card payments. ACH settlements take 2 – 3 business days, while cheques can take up to 6.
In addition, National Automated Clearing House (NACHA) – the electronic payments association – has approved an operating rule that will provide for same day ACH transfer in the near future.
- More Secure
Common concerns surrounding cheques are those of security. They are vulnerable to signature forgery and are easily misplaced. Unlike cheques, ACH transfers are direct without any intermediaries.
Customers who are hesitant to provide account details are assured of their safety, as some ACH payment processors provide a two-way micro validation to confirm the authenticity of each party. All transaction information is verified, and confirmation of no transaction blocks is provided, making the process a great asset to any business.
- Greater Convenience
ACH carries benefits to the business and the payer. Businesses can offer customers increased flexibility with either recurring or one-time payment options. Transactions take place between two bank accounts, eliminating the need to follow up on failed payments due to card expiry.
Payers experience a simplified way to deal with money as bulky cheque books are no longer needed. With ACH, money transfers are convenient and simplified – no cheque cutting involved.
- Ideal for Recurring Billing
Subscription model-based businesses can benefit greatly from ACH recurring billing. With more transactions comes increased transaction costs, losing money for the business. ACH is the best choice as transaction fees are significantly reduced.
Make the Switch
Stop cutting costly cheques and switch to ACH transfers. They’re a user friendly, easy and convenient payment processing method and an effective alternative to traditional transactions. Businesses can use the savings they gain in other aspects of their operations. ACH means a smarter way to deal with financial transactions.
For more information on how ACH payments can help you and your business, please visit www.ach-pay.com ..