ACH network saw an exceptional year in 2019 as the annual growth rate reached a 12-year high.
There were 24.7 billion transactions on the ACH network, an increase of 7.7% over 2018. The worth of those payments was $55.8 trillion, up approximately 9% from 2018.
The above report shows that modern ACH network plays a crucial role in the business’s payment system.
In the US, there are two primary modes of payments. First, credit card/debit card processing and second is the ACH Payment Processing network.
There is a major difference in how they work. Credit card processing offers an authorization component. This means you can work in near real-time.
ACH stands for Automatic Clearing House. The ACH payment operates in a batch environment where funds get transferred from one bank account to another bank account.
ACH payments are more trustworthy, more cost-effective, and more convenient than traditional paper checks.
ACH Processing
Paper checks are a hurdle for both businesses and their customers. This may be the reason to lose your customers. ACH network eliminates the needs of paper checks. It only processes two types of payments: Direct Payment via ACH and Direct Deposit via ACH.
Direct Deposits
This is the deposit of amount for one of the following:
- Funds for payroll
- Employee expense reimbursement
- Government benefits
- Tax and other refunds
- Annuities
- Interest payments
This includes any ACH payment from a government or business to a customer.
Direct Payment
This method is the use of the amount to make a payment. Anyone can make a direct payment as either an ACH credit or ACH debit.
- ACH credit will push the fund into an account. For instance, when a customer makes payment with their bank to pay a bill online.
- ACH debit will pull cash from an account. For instance, when a customer sets a bill for recurring bill payment. Amount gets debited automatically.
Typically, to complete an ACH, the customers’ bank account and routing number must be shared. Without an account, number customer cannot be debited.
Types of ACH payments
- Direct payment via ACH transactions
- eCheck
- Debit card payments online
- Recurring payments
- One-time payments
- Moving funds from one account to another
The ACH network is responsible for processing all these payment methods.
Benefits of using ACH payment processing
There are several benefits of ACH Payment Processing, which we will discuss in brief.
Lower cost
If your business accepts credit and debit card payments, you must be aware of these services’ transaction fees. The processing fees for ACH payments are comparatively less to credit card processing. ACH payments are the least expensive payment mode for merchants to accept.
Security
Paper check payment modes are the most vulnerable to fraud. It can be compromised or defrauded in so many ways. But ACH payments are the safest for both merchants and customers, especially compared with paper checks.
Convenience
The funds are transferred electronically, saving you the hurdle dealing with a physical check. You will no longer require to visit the bank or deal with paper invoices, checks, and records.
Reduce human error
ACH payment processing is the best way to cut down on human data entry error and the ensuing time spent fixing them. You can easily eliminate the chance of human error with ACH Payment Processing.
Recurring billing
ACH payment is an excellent option for companies working on subscription-based services. Your customers do not need to remember the billing date with recurring billing. The bill will be paid automatically on time.
Faster processing time
Unlike the paper checks, ACH payment is made online, cutting down processing time. Banks give preference to ACH processing over the physical check. It means processing time will be less using ACH Payment Processing.
Customer prefers ACH payments
Most of the US clients prefer ACH payment over traditional checks. The recurring billing feature takes out the stress of remembering payment dates to customers. Since ACH payments are safe comparing to physical check, the customer prefers to pay via ACH.
How do I get ACH Payment Processing?
As a merchant, if you wish to opt for ACH Payment Processing, eMerchant Pro is the best choice for you. eMerchant Pro offers ACH Payment processing along with its merchant account service. It provides integration of a payment gateway along with your website to help you in ACH Payment Processing. A payment gateway facilitates the actual payment and deposits the money directly into your account.
Your business model hardly matters for eMerchant Pro. Whether you are a high-risk merchant or low-risk merchant, it has a complete payment processing solution for you.
Benefits of ACH processing with eMerchant Pro
- Lower costs
- High volume processing
- MOTO electronic check payments
- Rapid bulk processing
- Electronic check verification
- Superior customer service
- Recurring billing
- 24*7 reliable customer support
To get more information about ACH Payment Processing, apply now and give us a chance to arrange a call from our experts for you.