The Benefits of ACH Processing
FlexibleGreat for B2B and B2C transactions.
Volume & Ticket FriendlySeamlessly process high volumes and tickets above $2,500.
Fast SettlementsMost transactions settle in one business day or less.
Recurring TransactionsSet up automated, recurring payments.
Cost EffectiveInexpensive compared to other payment processing options.
Safe & SecureTransactions are encrypted to protect the user.
Time EfficientAutomated process minimizes need for dedicated staff.
Environmentally FriendlyElectronic transactions and record keeping eliminate paper waste.
Automated Clearing is Simple, Secure… Painless.
Automated Clearing House processing or ACH Processing, is a payment processing service that allows payments to be made from business to business, business to consumer, or business to employee by directly depositing funds from one bank account to another easily and electronically. ACH processing is widely used and is known for being a safe and reliable form of payment processing mostly because it has its own governing body known as the National Automated Clearing House Association or NACHA.
The idea of ACH processing in its simplest form is that payment is a direct deposit, meaning that it goes from one bank account to another in a seamless, automated process that is authenticated by the user and verified by the automated clearing house. The most common use for ACH Processing is bill payments for cars, insurance, rentals, utilities, or other billing transactions as well as for paying employees but it is also a valuable service for high risk merchants or businesses. This direct deposit method of payment can be used for one-time payments or set-up for recurring payments.
How difficult is it to get an ACH Processing account?
Getting an ACH processing account is a similar process for applying to a merchant account. Merchants need to provide:
Complete and Signed Application
Articles of Incorporation
Identification (Drivers License Preferred)
SS4 Form (Tax Indentification Certificate)
Most Recent 2 months of Bank Statements (from account on application)
Sample recording of consumer payment information capture (if MOTO)
Void Check or Bank Verification Letter (from account listed on application)
Most recent 2 months of ACH Processing statements (if applicable)
Detailed description of the business model
Copy of the complete terms and conditions for sale
Login Username & Password (if website)
How do merchants benefit from ACH Processing?
When merchants use ACH processing in order to make or accept payments there are a multitude of benefits. Some of those benefits are:
- On average, the costs & fees associated with ACH processing are less than those associated with a merchant account.
- Settlements are quick. NACHA rules have adjusted to allow same day settlements in many circumstances.
- In some cases it eliminates the need for businesses to draft checks and the man power resources required to keep record. On the consumer side they don’t have to write out, purchase postage, and mail checks.
- It’s easy to use. The biggest, most important task is to remember to batch out and that is a simple and quick process.
- ACH processing can be set up for recurring billing which means that money can be pulled automatically at set time intervals.
- This is also a good substitute for wire transfers because for small payments you can save a lot of money on fees where a wire can cost 15-45 dollars to initiate and / or receive.
How can ACH Processing work for me?
In most cases, the information provided by the end user in order to initiate an ACH transaction are intimate knowledge which virtually eliminates the potential for fraud as compared to fraud occurring from credit card processing. The ease of automation more or less makes the biggest task in ACH processing remembering to batch out so that the transactions are able to run through the automated clearing house and settle to the assigned bank account in a timely fashion. Although ACH processing is mostly used in traditional manners such as bill payments for cars, insurance, rents, utilities, or other recurring billing transactions as well as for paying employees; it is also available to high risk merchants selling high risk products or services for subscriptions, memberships, recurring billing models. Some will advertise high risk ACH processing, but it’s not the processing that is high risk; it’s the product, service, or merchant that is in fact high risk. Some high risk ach processing merchants are:
- Adult membership sites
- Collections businesses
- Auto discount clubs
- Medical discount clubs
- Recurring billing for high risk products or services
- Membership clubs (in general)
- Discount buying clubs (in general)