In this blog we’ll look at how accepting ACH payments can enhance payment processing for businesses. We’ll explore the benefits of taking ACH payments and which types of businesses can benefit from ACH. Although businesses who receive ACH payments from their customers are not new, we’ll cover some aspects of ACH payments that might broaden your view.
What are ACH Payments?
ACH stands for Automated Clearing House. ACH allows for payments to be electronically transferred quickly from one bank account to another.
Over the past couple of years, the use of ACH payments has grown significantly. According to the Nacha website, in 2021, there were 29.1 billion ACH payments valued at $72.6 trillion. Also, it’s important to note that same day ACH payments grew by 74%.
What are the Benefits of ACH Payments?
Businesses who accept ACH payments from their customers can benefit in several different ways. Below is a brief look at the benefits to businesses who accept ACH payments. However, in this blog, we’ll go a little more in depth on the benefits and uses of ACH payments.
- Eliminates cost of paper checks
- Accept funds from bank accounts
- Reduces potential errors and fraud
- Less fees than other payment methods
- Real time processing gateway
ACH payments are more efficient than card, wire transfer, check, or cash payments. ACH payments go through a single clearing house. There are not many additional steps. ACH payments are not only efficient, but cost less per transaction, offer better security and are more convenient than other payment methods.
2. Reversible and Secure
Although wire transfers are very fast, payments cannot be reversed, and the identities of the sender and recipient can’t be verified. However, with ACH payments, transactions are reversible, and users are authenticated to prevent fraud. Which is important for obvious reasons. Also, one of our own studies found that security is a top concern for both end users and merchants.
Additionally, ACH payment information must only be verified once and not on every single transaction. This, coupled with the fact that ACH transactions are between two parties, helps to greatly reduce fraud.
3. Recurring Payments
ACH payments are great for use with recurring payments and payment plans. ACH payments allow merchants to receive payments automatically from their customers on a payment schedule that works best for both parties. With our mobile-first payment app, PayWeb360, customers can make safe and secure payments automatically monthly, bi-weekly, or weekly. PayWeb360 is also ADA compliant, supports Spanish out-of-the-box, and can drastically improve payment completion rates.
4. Convenience Fees
Businesses that utilize ACH payments can offset the cost of payment processing by charging convenience fees. Businesses that accept credit card and debit card payments may also charge convenience fees, but convenience fees may only be assessed one time. With ACH payments, convenience fees can be charged per transaction.
Businesses that can Benefit from Accepting ACH Payments
It’s true that there are many different types of businesses that can benefit from accepting ACH payments from their customers. However, there are some businesses that may want to consider using ACH payments and recurring payments together.
Membership-based businesses and businesses that require customers to make monthly payments may find that recurring payments through ACH can really work well.
Businesses that can benefit from ACH and recurring payments include:
- Dental practices
- Chiropractic clinics
- Rent-to-own (RTO) businesses
- Urgent care clinics
Accepting ACH Payments: A Recap
In this article we looked at ACH payments – what they are, and the benefits of using them.
ACH payments are efficient payments that are sent from one account directly to another. Also, accepting ACH payments allow merchants to charge convenience fees per transaction to offset payment processing costs.
Unlike wire transfers, ACH payments are reversible and significantly more secure. When used in conjunction with recurring payments, businesses can offer their customers convenient automated payment plans.
If you would like to learn more about PaymentVision’s ACH payment solutions, or other payment solutions such as IVR payments and our mobile-first payment app, PayWeb360, fill out the short form below to receive information in your email or contact us and set up time with one of our sales reps to meet with you and answer your questions.