What Are ACH Transfers?
ACH transfers are electronic money transfers from one bank to another that are handled through the Automated Clearing House (ACH) Network. Nacha, the organization in charge of these transfers, explains that the ACH network is a batch processing system that banks, and other financial institutions use to aggregate these transactions for processing, which normally occurs three times per day during business hours.
It's possible that you're making use of ACH transfers without even noticing it. ACH transfers include a variety of activities such as receiving your paycheck through direct deposit and paying your bills online using your bank accounts. Transfers to individual retirement accounts (IRAs), taxable brokerage accounts, and college savings accounts can also be made using automated clearing house (ACH) transfers (commonly known as electronic funds transfers). In addition, business owners may employ electronic funds transfers to pay vendors and receive payments from clients and consumers.
The use of automatic payments through the system is becoming increasingly prevalent.
Nacha claimed that more than two billion internet transactions were initiated in 2020, a significant increase over 2019. This is a 15.2 percent increase over the previous year's figure. The number of person-to-person and business-to-business transactions climbed as well, reaching 62 million (44 percent) and 1.2 billion (15 percent) over the same time period, respectively.
The benefits of ACH payment processing
There are a variety of reasons why automated clearing house (ACH) payments are becoming an increasingly popular alternative for organizations.
Processing costs are being reduced.
ACH payments have the lowest processing fees of any sort of payment, and this is often true. If you work with a supplier that charges a fixed fee, processing ACH payments will cost your company far less money than processing credit card payments.
There will be fewer decreases owing to the expiration of the contract.
Items in checking accounts such as credit and debit cards do not "expire," unlike credit and debit cards. Thus, when processing ACH payments, you will see far less declines.
You will find it more convenient.
Paper invoices, paper checks, and time-consuming trips to the bank are no longer necessary.
Customers will appreciate how handy it is for them.
Providing customers with a variety of payment choices improves their overall customer experience. Customers no longer have to go through their belongings for their chequebook on a monthly basis. By enrolling in recurring billing, they may simply "set it and forget it."
The Bottom Line
ACH transfers may be a convenient and generally hassle-free method of sending or receiving money. In either case, be certain that you are familiar with your bank's regulations regarding ACH direct deposits and direct payments. Additionally, be on the lookout for ACH transfer frauds. For example, a popular scam includes someone sending you an email informing you that you're owed money and that all you need to do to obtain it is supplying your bank account number and routing number, which you can do by entering your information below.
ACH Processing – Connected.co
A legitimate credit card or a sufficient credit card balance is not always available to all of your consumers. Some people might just prefer to pay by bank check rather than credit card. Giving your consumers the option to pay with a bank check or an electronic check is one of the most straightforward methods to increase sales.
ACH payment processing can be deployed as a primary payment option or as a backup payment option in the event that a customer's credit card is declined for any reason. Over the course of nearly two decades, Connected.co has provided ACH processing services to forward-thinking retailers.
JW Epply has been a senior executive for over 10 years, during which time he has met and exceeded growth and revenue goals in exceedingly difficult verticals. Epply is recognized as an efficient, dynamic leader with a strong background in sales and sales process, management, and organizational strategy. He holds a Bachelor’s Degree in Organizational Management from the University of Wyoming, and is an accredited Certified Payments Professional (CPP) from the Electronic Transactions Association (ETA).