ACH (Automated Clearing House), also called “direct payments,” is a financial network for electronic payments, responsible for money transfers worldwide. The primary purpose of ACH payments is to transfer funds from one account to another electronically, eliminating the need for paper checks or cash.
The volume of ACH payments has increased hugely in the last few years. In 2021, the ACH network reported a total of $29.1 billion in payments. ACH payments have emerged as a preferred alternative to paper checks. It enables secure transactions, easier accounting, and scalability to your business operations.
Completing an ACH payment takes only half the time needed for making a check payment. You also don’t need to go through the hassles of writing, stamping, and mailing the checks physically.
An added advantage of ACH payments is that the processed payment is immediately reflected in your bank account, thus streamlining the account reconciliation process.
The following points explain other benefits of using ACH payment for your business:
ACH payments are processed in batches. This reduces the rate per transfer, making it less costly than payments made via credit or debit card.
Transactions made via ACH payments are reflected in your bank account almost immediately, even if the actual processing may take 2-3 days to complete. This is faster and more convenient than paper check processing.
The ACH payments network is regulated with many layers of security. Reputed financial institutions directly manage the transactions, thus eliminating any chance of disputes regarding hidden charges.
ACH payments can accelerate your cash flow, irrespective of the industry you’re working in. Another benefit of ACH is its lower fee compared to other wire transfers.
While setting up ACH payments for your business, you should follow the below-mentioned steps for smooth and easy onboarding.
Creating an ACH payment account is the first step to start receiving B2B ACH payments. However, before setting up your ACH payments account, you must choose the best payment processor to handle your transactions. You’ll need the following documents while filling out the setup form:
While choosing a suitable payment processor for your ACH payments account, consult with your bank regarding the processing charges. It is advised to compare different operators with the details of their features and choose the best one according to your need.
While filling out your business details, you’ll come across a lot of other terms and conditions of ACH payments. It is advised to read all the information carefully and proceed with caution. If you choose to partner with an ACH payments operator, you must comply with all the rules and regulations of the payments provider.
After completing the necessary validity checks, the service provider will fetch your payment details. This is needed to get the required inputs into the system. The entire process can take up to 5 business days to get completed.
You need to introspect your business needs before selecting the best ACH payment processing provider. Here are some more important factors to consider when opting to provide ACH payment options to customers:<>
Setting up ACH payments with HighRadius is easy, quick, and fully secure. We help you accept payments using the payment links embedded in the invoices sent via email. Our solutions enable you to provide a superior customer experience by offering flexible and unique payment methods.
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