Automated Clearing House or ACH is a way of transferring funds electronically between bank accounts. ACH payments are also sometimes known as eChecks, and are an alternative to paper checks for customers needing to make payments to businesses. ACH payments have several advantages over paper checks, which is why many businesses and customers prefer to use this method of payment.
The convenience of ACH payments has led to more and more businesses to adopt this method of payment. By 2016, the total annual volume of ACH payments had reached $ 5.7 billion. If you’re looking for My Payment Savvy options for your businesses, it’s worthwhile to consider the benefits of using ACH transfers to receive payments.
What Are ACH Payments?
ACH payments are used to transfer funds between two bank accounts electronically. Such payments can be customer payments to businesses, bills, payroll, and even taxes paid to government entities. They offer a more convenient alternative to paper checks since there is no need to make an extra effort to deposit the eChecks. For businesses, ACH payments are a cost-effective and reliable way of accepting payments from customers.
ACH transfers of payments from one bank account to another are handled by an automated clearing house, which is how they get their name. The transactions are processed in batches by the receiving bank at the end of the business day. The funds are normally available in a day or two. There are many clearing houses and various kinds of financial institutions offer this service.
How Can Accepting ACH Payments Benefit Your Business?
For both businesses and customers, ACH payments are a convenient alternative to paper checks. For businesses, they offer lower transaction costs than other methods of payment, as well as greater security and convenience than paper checks. There is also less potential for human error in payments and record-keeping. ACH transfers can be used by customers to easily set up recurring payments, eliminating a source of stress and worry.
For business owners seeking My Payment Savvy methods of receiving payments from customers, ACH transfers are worth looking into. Here are six ways in which using ACH payments can benefit your business.
1. Lower costs than credit cards
There are several ways in which a business can accept electronic payments from customers, such as credit and debit cards and ACH payments. None of these are free for the business, which has to pay processing costs for each transaction. However, ACH or eCheck payments have the lowest processing fees, which makes them the most cost-effective type of electronic payment.
Paper checks do have lower transaction fees than any kind of electronic payment, but they come with the hassle of having to deposit them in the business bank account before the funds are available.
ACH payments are much more convenient for the business. With eChecks, there is no need to make a special trip to the bank to deposit paper checks. Many banks now allow you to deposit paper checks online via their apps, but this takes time, and the technology is not yet bug-free. ACH payments are complete with just one transaction.
ACH payments offer much greater security than paper checks for both customers and businesses. The security of paper checks can be compromised at many different stages of the payment process. If the check is being mailed, it can be lost or stolen along the way. Paper checks are also vulnerable to other forms of fraud like tampering and identity theft.
Recurring paper invoices and paper check payments provide more opportunities for human error as well as fraud. By accepting ACH payments, your business can do away with the risks that go with go paper checks.
4. Easily set up recurring payments
Unlike paper checks, it’s easy to set up recurring payments with ACH transfers. This makes it a convenient method of payment for both customers and businesses. Businesses save on the time, effort and cost of generating new invoices and customers don’t have to worry about missed payments.
5. Accurate payments and record-keeping
ACH payments reduce the potential for human error at all stages of the payment process, from invoicing through payments to record-keeping. Correcting such mistakes is another drain on time and productivity. With eChecks, accurate record-keeping can help prevent such mistakes.
6. Customers prefer ACH payments
With the security and convenience of ACH payments, customers prefer these to paper checks. The ability to set up recurring payments means that they never have to worry about missing payments. Making the checkout and payment process easier for customers is one of the best steps a business can take to build customer loyalty. ACH payments can help your business to retain customers and ensure that they return to do business with you.
How to Set Up ACH Payments for Your Business
ACH payments are a good payment solution for businesses of all kinds, especially if they handle a high volume of financial transactions each month. Many financial institutions, like banks, credit card companies, and even some accounting software let you set up ACH payments. With a choice of payment processors, you can shop around for the best rates. Your current bank or financial services provider may already have ACH facilities, and all you need to do is to set these up to start receiving payments.
ACH payments are a secure and cost-effective way for businesses to receive payments electronically. With all the benefits they offer for both businesses and customers, their popularity and use is soaring worldwide. They may be a good option for your business to receive payments electronically.