Businesses have been acquainted with cash, checks, and credit cards for a long time but are now gradually transitioning in using Automated Clearing House (ACH) payments instead. An ACH transaction is the process of electronically moving money from one bank account to another using a unique routing amount (like what’s found at the bottom of a paper check).
Presented below are 5 key ways ACH processing can be beneficial to your business:
Less Paper Work & Hassle
ACH transfers save businesses from the hassle of paper invoices, checks, and trips to the bank. With no more need for these time-consuming procedures, businesses can use their payroll and accounting staff to accomplish other goals. In the meantime, your customers will also benefit from the convenience and increased flexibility of payments.
Lower Fees Compared to Traditional Methods
Typically, ACH payments have the lowest fee compared to using check and bank cards. The reason being that ACH transactions do not use intermediaries to transfer money, which often leads to higher costs. Instead, the funds are transferred directly in one bank account to the recipient.
Recurring Billing is Easy with ACH
automatic payment can be done easily by setting up recurring billing using ACH payments. If the customer has authorized the billing schedule, you can use a payment process program to immediately invoice the customer. The whole process is also automated with auto-invoicing, payment and payment tracking – it is so easy to use.
Quicker Access to Funds
ACH payments can only be challenged for three reasons: it was not the specific amount authorized, it had been processed earlier than the authorized time, or it was not authorized at all. On the other hand, traditional credit cards could be disputed for a much wider variety of reasons. With ACH payment processing, you receive immediate failure notification, which will take the waiting and questioning out of when you will get paid. An ACH purchase 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.
Say Bye to Frauds
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 using a totally secure system that is encrypted. Even when you need to send a paper check, customers provide the same information required for ACH processing. The difference is that paper checks are exchanged through multiple hands in the process and run the risk of being left out in an unsecure area or lost. This will not happen when transferring electronically as everything is safely encrypted.