Faster than checks, cheaper than credit cards. Why you should ditch the snail mail and cut costs with ACH payments for your business.
If you're like most business owners, you're always looking for ways to streamline your operations and make things easier on yourself. One great way to do that is by taking advantage of ACH payments. Here are five unexpected ways ACH can help you run your business more efficiently and professionally, increase profits and productivity, and avoid costly mistakes.
What is ACH?
Automated Clearing House (ACH) - what is it, and how can you use it to your advantage? If you're a business owner, you may have heard of this term but not really understood what it meant.
You might be surprised to learn how often you've used it for things such as to pay your bills or automatically deposit your paycheck at a previous job.
ACH is a way to get paid directly or transfer money in the United States without using your physical card, checks, manually keying in transactions, wiring money, or handling cash. Money is electronically transferred via the ACH network via direct deposit or direct payment. Money can be taken from one account via ACH debits and deposited via ACH credits.
Why is this helpful?
First of all, it can be a cheaper alternative to using credit cards if convenience and speed is not your priority. Why not just use checks? In the age of digitization, ACH payments knock checks out of the park to eliminate the need for printing, signing, mailing and cashing physical checks. ACH payments are a popular alternative to e-transfers for the reason that you can set up recurring payment and payable invoices- meaning less work of having to enter payment information and gather payments every month manually.
This blog post is here to break down ACH basics for you. In short, ACH is a system that allows businesses to transfer money between each other electronically. This process is much faster and more efficient than traditional checks or wire transfers. Additionally, using ACH can save your business money in processing fees.
What businesses can benefit from ACH payments?
If your business model uses any of the following, or you subscribe to any of these business industries, then ACH may be a good option for you.
- Your business offers payment installments
- You have a payroll
- Many of your customers pay via check or credit card
- You are a landlord or property manager
- Your company provides recurring payments and subscription-based services like gym memberships
Are you still dragging your feet on signing up for ACH? You could be missing out on a lot of great benefits. Here are five reasons why you should start using ACH today:
Benefits of using ACH for your business
1. Improved efficiency
How much time do you spend in a month calculating how much to charge a customer, sending out custom invoices, and chasing/ processing payments to get paid finally? You don't have to remember to mail out invoices or request e-transfers every month, set up your customer banking information once, and automate your paydays.
ACH payments go through very quickly (It may take up to 5 business days to set up the first payment, but then just two days on average for every subsequent payment), which means you won't have to wait long for your money to arrive.
With ACH, you do a little work upfront to reap the benefits over and over again every month without the headache.
2. Increased profits
Making it easier and more convenient for your customers to pay you means more money in your pocket. Aside from seeing your money sooner, you will also keep more of that money in your pocket since ACH fees are typically lower than credit card fees.
How much do payment processors charge for ACH payments?
At helcim, we charge just 0.5%, compared to Rotessa at 1%, Square 1% and many others who charge a flat fee of $1 or so for ACH payments. Bank to bank transfers are pretty cheap, especially when you consider that credit card processing fees are usually double at 2% or more.
3. Better customer service
Happy customers is essential to a successful business. Happy customers are more likely to return, recommend you to their friends, and leave positive reviews. Fortunately, there are several ways to enhance customer service and satisfaction. Offering convenient payment methods, such as ACH payments, is one of them. With ACH, your customers can pay quickly and easily without worrying about glitches or delays. Plus, they'll appreciate the convenience of being able to make a payment right from their bank account.
Smaller businesses and customers may be more hesitant to provide their account information than a credit card at first. Still, many find that the convenience of setting up recurring payments is worth it.
When customers can pay with a single click instead of being dragged out in the cold to pay in-person or share their confidential information over the phone, they are bound to be excited about flexible payment options.
4. Avoid costly mistakes
Owning a business is expensive. Between inventory, labor, and taxes, there's not a lot of room for error when it comes to your bottom line. ACH payment processing can help take the guesswork out of finances and give you the peace of mind that comes with knowing your cash flow is taken care of. Plus, no more chasing and keeping track of buried invoices or updated payment information for expired and lost credit card information. Your customers don't have to worry about missed payments, and you can count on the stability of scheduled bank withdrawals.
5. Professional business tools
Send out professional invoices via email and follow up with an SMS request for outstanding payments; your customer can view, click and pay their invoices via ACH payment in minutes. Use templates to create professional and clean online invoices. Not only do they look more legitimate and secure than an email with an email for transferring, but they are also easy to set up and pay- which helps your customer feel more secure about paying online. Plus, ACH payments are incredibly safe. Transactions are processed through standardized checkpoints and the ACH network, making it much harder for hackers to steal your information.
Have questions about ACH payments?
Now you know what businesses can benefit from ACH and all the great time and cost-saving benefits. If you're still on the fence about what works best for you, chat with our merchant experience team, and we can assess your concerns and give you a commitment-free assessment. We offer merchant accounts and services- including ACH payments at no monthly fee or extra cost, at competitive interchange-plus pricing- with no contract! Please find out how you could be saving effort, money, and time with every paycheck; contact us today.
Is ACH as secure as Credit card processing?
While ACH is a secure transaction, it does not typically offer senders as much protection for customer satisfaction and chargebacks as credit cards. ACH payments can be changed or canceled, and even disputed. Businesses in the U.S have approximately two days on average to refute the charge, and consumers longer.
If the transaction is legitimately authorized, transactions usually have to be settled legally or with the merchant. Users are still afforded the same protections against fraudulent transactions, just not the same dispute advantages as credit card chargebacks.
How long do ACH Payments take?
2-3 days for processors to get money from one bank and another 1-2 days to deposit it into a merchant account, so usually about 3-4 days on average. Although this is relatively quick, credit card payments and wire transfers may be a better alternative if the transaction speed is a more significant priority than cost.
What information do I have to collect from Customers to process ACH payments?
To process an ACH payment, you will need to gather customer information such as their account, bank, transit number, and personal information such as their name.