If your business relies on repeat payments, such as a monthly service plan, a subscription or a club membership, you know how time-consuming and costly it can be to invoice and wait for payments from the same people every month. One easy solution is to accept ACH payments. These payments can be automatically deducted from your customers’ checking account, saving you both time and money.
How do ACH payments get processed?
ACH (automated clearing house) payments are initiated by a business or other entity and sent to the customer’s financial institution. The bank then verifies that the request is valid and processes the transaction on behalf of the entity originating the request. ACH payment requests are sent in batches to the clearing house which then okays the transaction and releases the funds into the business’ checking account.
How long does it take to get access to funds via and ACH payment?
Once the transaction has been issued, ACH payments are generally available to vendors within three to five business days. This is about the same amount of time it takes to access American Express funds and a day or two longer than Visa or MasterCard. ACH transactions are usually processed by banks before physical check transactions.
Advantages to accepting ACH payments
In addition to the not insignificant advantage of being able to easily and cost-effectively process recurring payments, ACH payments offer a number of benefits:
1. Lower transaction fees
Compared to other methods, ACH payments are anywhere between one to three percent cheaper for most vendors. This is in comparison to other processing methods – particularly credit cards – which often attract higher fees.
2. Less potential for fraud
While paper checks are the payment method most likely to result in fraud, ACH payments are much more secure. In addition, ACH can’t be lost in the mail as paper checks can. In this way, your payments can’t really fall into the hands of a third party bent on misusing the check.
ACH payments are convenient for both parties, saving you and your customers time on chasing or remembering to pay.
Would you like to accept ACH payments for your business? IntegraPay makes it easy for you to accept ACH payments. To learn more about how ACH payments can take the hassle out of your payment processing, be sure to get in touch today.