If you’re a business owner or entrepreneur who wants to maximize profit and minimize expenses, a custom ACH processing solution for your business may be just the ticket. ACH payments are an excellent way to:

  • Reduce costs, especially when compared to check and credit card processing.
  • Increase payment speed, convenience, and flexibility.
  • Add payment options for your customers.
  • Collect payments in a highly secure manner.


What are ACH Payments?

white stone government building, blue sky

ACH is backed by the government, unlike other forms of payment processing.

ACH (an acronym for Automated Clearing House) payments are electronic transactions that automatically debit or credit an account. These payments require that a customer give authorization to debit directly from their checking or savings account for the purpose of paying bills, and are regulated by the National Automated Clearing House Association (NACHA).

If you’re utilizing direct deposit for your payroll, you’re already using ACH Payments to pay your employees. Other common examples include person to person (P2P), business to business (B2B), mortgage payments, insurance, and tax payments – all of which are regularly automated, adding convenience and peace of mind to the the payment collection process.

Here are three key reasons why switching to ACH is bound to help your business in the long run:

1. ACH Payment Processing Saves You Money

man taking cash out of his wallet while looking at his laptop

A dollar saved is a dollar earned – ACH can help make it happen.

If you’re running a brick and mortar retail store, credit card processing is estimated to cost you 2 to 2.5 percent of the transaction total. This value is even higher for card-not-present purchases (ones made online, for example), where the amount can be as high as 3.5 percent of the transaction.

Using paper checks typically has a lower cost, often estimated at $1.22 per check, though there is ample evidence that the cost of paper checks is significantly higher. In some cases, this cost is estimated to be as high as $20.00 per check after all labor and invested time is accounted for.

Conversely, at an estimated cost of $.60 per transaction, ACH payments are among the cheapest payment processing methods available. An in-depth study done by the Association of Financial Professionals reveals how low these payments can be. In this study, AFP found the Best Estimated Median Cost to be $.56 per transaction.

Here’s a quick (albeit simple) example, using real numbers to highlight the savings available when using ACH processing. For this example, we’ll be using ten transactions of $100.00 ($1,000 in total).

  • Credit Cards: Using the lowest estimated rate of 2%, ten $100.00 transactions would cost $20.00 to process.
  • Checks: To be magnanimous, we’ll use the lowest estimated rate of $1.22 per check, leading to a total processing cost of $12.20.
  • ACH Payments: Assuming a cost of $.60 per transaction, ten $100.00 transactions costs a mere $6.00.

And remember, the fees for credit cards and checks will only increase as dollar amounts increase and complexity is added to the processing. ACH payments will retain the flat fee, low rate regardless of transaction amount. Additionally, features like recurring payments and eChecks increase customer retention and minimize revenue leakage, leading to a stronger cash flow.

2. ACH Processing is Fast, Convenient, and Flexible

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Flexibility is something nobody should take for granted.

Ever missed a payment deadline and been stuck with a late fee, or even paid your bill on time, only to find the payment settled after its due date? Not with ACH Payment Processing. In a matter of minutes, users can set up an automated billing account and relax, knowing they’ll never miss a payment deadline again. ACH credit transactions settle in one to two days, and ACH debits settle in just one day, per the rules of the NACHA.

People love easy, flexible options, especially when it comes to their money. By adding ACH Payments into your list of accepted payment methods, you’re making life easier for your customers. Increased options combined with ease of use is a great recipe for positive customer engagement, and can help lead to repeat business.

ACH can also be integrated seamlessly with almost any Point-of-Sale system or payment gateway, further increasing options for you and your customers. An effective POS system in tandem with ACH Processing will streamline and simplify business operations, all while improving the customer experience.

3. Greater Security for Your Customers & Business

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Keeping user data safe should be a huge priority for your business.

Concerned about the security of your customer’s payment information? ACH payments are regulated by the federal government, so there’s no need to worry about information finding its way into the wrong hands. The NACHA  and Federal Reserve System are responsible for maintaining the rules and regulations that govern the ACH network, ensuring that ACH payment processing is one of the most secure payment methods available. According to the NACHA, their operating rules, administered since 1974, are the foundation for every ACH payment.

Knowing and understanding these rules will help your business become better equipped to administer effective ACH payment processing, and will aid in the establishment of better risk management practices. Your customers will be able to rest easy with the knowledge their payment information is processed using a heavily monitored system – one that encrypts their data and requires multi-level authentication.

Take Advantage of the Benefits Today

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The future is brighter when you don’t have to worry about unfair transaction fees.

ACH processing presents a plethora of benefits for your business. Most notably,  accepting ACH payments will cost your business significantly less than credit cards and checks, and will fortify your company’s cash flow.

Furthermore, ACH payments are fast, easy to use, and offer unprecedented flexibility. These characteristics gives customers time to focus on things that matter to running their business, instead of wasting energy trying to remember a monthly payment.

Using ACH payments will give your customers increased payment options, boost engagement levels, and encourage repeat business – leading to increased profitability for your company. Heightened payment security equals happy customers, who know that their payment information is in safe hands.

If you’re looking to improve your business, gain access to reduced rates, and work with the best experts the industry has to offer, why not get started today?

About the Author

Geoff Scott is a Payments Consultant for Motile LLC, where he strives to connect users across the internet with processing solutions for their small businesses. He also loves Thai food, craft beer, and an exhilarating game of squash (when he's off the clock, of course).