ACH processing can offer a wide range of benefits for business over other, non-electronic forms of payments, such as paper checks, and credit cards payments, which are often far more expensive to process than ACH payments.
Some of these benefits for companies include being more likely to get paid, and paid quicker, particularly for companies whose customers make recurring payments, such as for monthly bills, loan repayments or any other subscription-based product or service, and typically with lower transactional fees. Customers also benefit greatly from ACH payments, as they are easier, far more convenient and often safer than many alternative types of payment, giving them a far better experience.
Besides ACH processing being a more efficient, cost-effective alternative payment method to paper-based checks, it can also help you to expand your customer base to include those who otherwise were unable to use your services before, such as the 10 million consumers in the US who don’t have a credit card.
The main benefits of ACH payment processing are:
According to the Federal Trade Commission, as many as 9 million Americans find themselves the victims of identity theft each year. The leading causes of identity theft according to NACHA is the ease at which financial information can be obtained from paper-based checks, bank statements and credit card bills, all of which consumers often dispose of without taking proper measures to ensure the safety of their personal information before doing so.
ACH payments can help to mitigate the risk of identity theft that paper-based checks present, as all transactions occur automatically and electronically, reducing the number of individuals who are able to access a customer’s personal or financial information. In addition, and as ACH transactions are electronic, they can’t be lost in the mail, misplaced or stole, which means that any problems that may occur with an ACH payment can be resolved quickly, far more so than with paper checks.
Better Access to Funds
Unlike paper checks, that typically take up to 5 business days to clear before they are accessible when deposited into a bank account, ACH payments can make funds accessible to account holders much faster, without such lengthy delays.
With ACH, recurring payments only require authorization once, prior to processing the first transaction, with the NACHA rules not requiring further authorization to continue making payments. This is especially so when it comes to direct deposit payroll checks, as having these credited directly to your employees accounts will be more convenient for them as they won’t need to physically pick up their check or visit the bank to cash or deposit it. In this case, ACH payments also remove the need for you to make special arrangements to pay employees who are away on holiday, leave or working away from their usual place of business for extended periods of time.
All transactions are not created equal, particularly when it comes to ACH, as banks will likely give priority to electronic payments over paper-based cheques. This priority makes it more likely that you’ll be paid if a customer doesn’t have enough funds to cover multiple payments that are coming from their account at the same time, with banks being likely to bounce a paper check rather than decline an ACH transaction in such instances. This isn’t always true, as it does depend on the bank, however more often than not this will likely be the case.
More Likely to Get Paid
There are a limited number of dispute reasons for ACH payments, with these being that a transaction is not for the exact amount authorizes, was processed before the authorization date or was not properly authorized in the first place. This makes ACH payments both far more reliable than other methods of payment for recurrent billing, such as credit/debit cards, and faster to settle, as banks release funds quicker than they would with other payment methods due to the lower rates of customer disputes and fraud with ACH payments.
Lower Transactional Costs
The biggest advantage of ACH payments is their lower cost when compared to other methods of payment, such as credit cards, which typically carry fees ranging from 1% to 4%. This is because they are processed in batches, which helps to keep transactional costs down.
Find out more about the benefits of ACH payment processing from ACHPay
If you’d like to find out more about the benefits of ACH payment processing with ACHPay, and how our solution can benefit you and your business, please get in contact with us to speak to one of our ACH sales representatives.
You can contact us via the form provided on our contact us page. Once we receive your message one of our experienced ACH payment processing team will get back in touch with you within 24-48 hours.