ACH – The Low-Cost Payment Processing Alternative

If you pay close attention, there is always a slight pause between the moment a customer swipes their debit or credit card at a POS and the moment the payment goes through. While you may never have thought about this pause before, it is safe to say that it is of immense importance to you and your firm. Known as the Automated Clearing House (ACH), the pause is what ensures that there are enough funds available in the customers account to process the required payment.

The ACH consists of a huge electronic network related to making payments across institutions. Being used on an individual consumer-level, to huge businesses and government organizations, the ACH is a big deal and is solely responsible for the processing of 98% of electronic payments being carried out. This figure includes debit payments, automatic online receipt payments, individual consumer bill payments and business payments as well.

ACH E-Check Services

The entire ACH electronic network is inter-connected and acts as the hub of commerce in the United States. Simply, it moves money and sensitive information from a single bank account to another by making use of Direct Deposit and Direct Payment options that are made available with ACH transactions. These include both debit and credit transactions, international payment, government payments, business-to-business payments as well as all information related to the payments being made. On a yearly basis, the ACH network is known to move more than $41 trillion through 24 billion electronic monetary transactions. In doing so, ACH has become the biggest, most secure and reliable payment system in the world, thus adding value and allowing innovation for all its existing and potential participants.

Traditional methods of financial transactions tend to include the use of paper to carry necessary information. With the ACH Network, all transactions are conveyed electronically, thus reducing costs and allowing for much faster information processing.

The ACH is able to carry out two types of transactions, Direct Deposits and Direct Payments. Direct Deposits are the transactions that include credit payment generally from a business or government directly to an employee or consumer. For example, direct deposits can be used to deposit funds for payroll, government benefits, taxes, and interest payments. Direct Payment, on the other hand, is when the organization makes use of liquid funds in order to make a payment. Direct Payments via ACH can be both debit or credit transactions.

By making use of the E-Check or electronic payment facilities that ACH provides, your business can be open to multiple benefits. These include:

  • Increased Flexibility: As a business owner, making payments is a very important task that must be carried out effectively. Through ACH, all transactions are made easier and simpler.
  • Cash Flow: The presence of liquid cash within a business is a highly significant factor in determining its success. Through ACH, cash can be retained in the business thus improving the current cash flow as well as future cash flow forecasts.
  • Less Paperwork: By using electronic payment processing, there is less hassle involved as compared to the maintenance of paper checks.
  • E-Checks: With the ACH Network, business organizations or government ventures can easily convert their paper checks into electronic payments.
  • Low Cost: Using ACH means there is lesser cost involved in the transferring of monetary funds. This low cost is further reflected on to customers which helps keep their costs low as well.
  • Quick Transactions: The best part about ACH is how effectively and quick it can process bills, invoices and retail transactions.
  • Automated Recurring Billing Systems: As the owner of a large business, there are many payments that have to be made on a monthly or yearly basis. With ACH, you can set up automated recurring billing systems that can easily make these payments on the desired dates for you.

    Additionally, using the ACH network will also enable you to gain access to reporting tools that will allow you to track where your monetary funds are at any given point in time. These tools are 100% flexible and customizable to your preference, giving you complete control over your financial transactions and reports.

    Most ACH solutions tend to support E-Check payment processing as well as credit card processing. Both of these payment methods are flexible and cost-effective and are especially designed to suit the needs of many companies of all sizes and industries.

    ACH e-check services help in controlling and managing the economy in an effective manner. Without these helpful payment solutions, millions of consumers would become lost in the vast world of technological advancements and monetary fund transactions. Through ACH, payment processing is made much simpler, consumers are given multiple options and sensitive information is handled correctly and smoothly. E-checks are just another much simpler way to make traditional payments.

Accepting ACH Payments Online

ACH payments are easily received online, through the link between multiple computer networks. This payment processing solution can easily provide business owners, governments or consumers with a flexible payment method that allows them to use and accept electronic checks in a highly efficient manner. Much similar to the process of paper checks, ACH payments are transferred electronically which allows for much faster processing and simple transactions. Time and cost associated with traditional payment methods is significantly reduced, all while creating much better customer relations and maximizing profits.

The ACH payment process is one of the simplest options in the market. Individuals are required to provide their bank routing and subsequent account numbers on the online database. The initiated payment is then verified and transferred electronically through safe and compliant systems. This fund transfer is made within a few seconds and the other person receives them immediately. Large business organizations tend to make use of ACH payments instead of paper checks and credit cards due to the wide range of benefits it provides.

Accepting ACH e-checks is also quite simple. Virtual terminals allow consumers to accept monetary payments from any device with a working, stable internet connection. The ACH network safely allows the consumer to transfer the amount directly to your linked bank account, which again saves time and reduces costs. All electronic checks are transferred in a safe, confidential manner to ensure the security of consumers. With ACH e-check payment processing solutions, it is easy to access all transactions at one place and better manage your monetary funds and outstanding payments.

Much simply, here are the steps of obtaining an ACH e-check payment processing solution for all your transaction related needs:

  1. Research on ACH and decide whether the payment solution is effective and required for your organization.
  2. Conduct a detailed meeting with your bank regarding its policies on merchant service companies. These companies are a collective group which set up all ACH payments carried out.
  3. Fill out the necessary paperwork and make sure you read and understand all terms and conditions of using ACH at an individual level, business level or government level.
  4. Read the setup forms and begin using electronic transfers for all your payments and transactions.

    While deciding on whether or not to invest into an ACH payment processing solution, many people like to weigh their benefits and costs. To make the decision simpler, here are a few important benefits:

  • Transfer funds directly to customer bank accounts;
  • Give your customers ease and start accepting payments by phone, online, and in person;
  • Set up automated recurring billing systems that are linked to your bank accounts;
  • Save time and costs of using paper checks;
  • Receive monthly/yearly reports on your transactions;
  • Enable notifications on every transaction being made;
  • Develop better customer relations using flexible payment solutions.

ACH Cash Flow Loans

Since ACH is a product of process innovation and efficiency, one of the most useful services available in the lending marketplace is the ACH loan. ACH loans (or ACH Advance or ACH Cash Flow Loan) is a broad category of commercial loans that tend to differ in the methods that they are paid back.

The biggest benefit of gearing towards an ACH loan is how speedy and simple the whole application and approval process is. Unlike bank loans that may take up to a year to process and requires strong credit history or collateral, ACH loans are much easier to obtain. If the lender has confidence in you and the future potential success of your business, your application can be easily approved within a matter of a few days.

Repayment of an ACH loan is as simple as the transactions using the network are. Somewhat similar to recurring bill payments, the repayment amount of the ACH loan is automatically withdrawn on the prescribed date on a daily, weekly, monthly or yearly basis. Since the repayment amount is always fixed, previously agreed upon and easily predictable, it allows you to plan in advance and manage expenses accordingly. There are no unexpected fees involved which makes your cash flow flourish now and in the future.

When applying for an ACH loan, the lender is likely to review the statement of accounts of your business for several past months. This is to get an insight on your average closing balance and financial stability, allowing them to offer you an adequate loan with a reasonable payback period. The ACH loan agreement includes the amount, duration, fixed interest rate, cost of borrowing and the amount to be paid back on a fixed basis.

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