Do you pay bills electronically? Is your paycheck delivered to you through direct deposit? Those conveniences come from ACH, the Automated Clearing House Network. Find out what ACH processing does for you and others.
ACH Makes Direct Money Transfers Possible
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An ACH payment means money transfersdirectlyfrom one bank to another or from buyer to seller within one day. Many people use this method for reoccurring debts such as mortgage payments or monthly utilities. Another popular use is payroll direct deposits. Employees receive their paychecks automatically in their bank accounts on payday.
Businesses may set up ACH with suppliers they use consistently. Since these payments are electronic, you save on precious resources such as paper. Everything is handled digitally, and employees spend less time making or receiving payments.
ACH Processing Costs Slightly Less Than Credit Card Processing
For businesses, setting up ACH processing is as simple as deciding on a payment processor. If your business already accepts credit and debit cards, then you're already set up: ACH processing costs slightly less than credit card processing.
Ask your current payment processing service if it offers ACH processing. Check with your bank and make sure your accounts can receive ACH payments. If you operate in a high-risk industry, companies such as High Risk Pay can help with opening high-risk merchant accountsas they relate to ACH processing. Fees and services vary greatly so look for the best deal for your business.
ACH Offers Lower Processing Fees
For many companies, the advantages of ACH include lower processing fees and quicker access to money. Entering funds received is simple. Most of the popular financial software, such as QuickBooks, handles the bookkeeping. Bounced checks are no longer a worry as ACH payments clear quickly without the usual three- or four-day waiting period with check deposits. If a customer does not use credit cards, ACH payments offer an alternative to using debit cards or electronic check writing.
For consumers, writing checks becomes a part of the past. Your bank statements show ACH payments with amounts and payees, not just an amount and a check number. Setting up utilities and other monthly bills automatically means your payments are always on time.
ACH Processing Accounts for More Than 25 Billion Electronic Transactions
Today, it's harder finding a company that doesn't accept processing as a form of payment. Other ACH functions include payouts on annuities and interest, employee expense reimbursement, and government benefit payments and tax refunds. In 2016, ACH processing accounted for more than 25 billion electronic transactions. Online purchases only account for about one-quarter of ACH business. Direct business-to-business deals also make up a large percentage of ACH operations. Last year, employers made6.1 billion direct paycheck depositsthrough ACH, according to the National Automated Clearing House Association (NACHA).
Whether you make monthly automatic payments, pay over the phone, or receive your paycheck through direct deposit, ACH affects your day-to-day life. Electronic payments allow businesses to expand their markets and accept foreign currency easily. No matter if you're a consumer or a merchant, electronic payments can help make life easier.