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How Your Business Can Accept ACH Payments

How Your Business Can Accept ACH Payments

accepting ach payments

A temporary credit reversal refers to a situation where a financial institution places a temporary hold or reversal on a previously credited amount in a customer’s account. This is typically done as part of a dispute or investigation process when there are concerns about the validity or legitimacy of a transaction. During the temporary credit reversal, the funds are temporarily unavailable to the customer until the dispute or investigation is resolved. Membership-based businesses and businesses that require customers to make monthly payments may find that recurring payments through ACH can really work well.

accepting ach payments

The Automated Clearing House (ACH) network makes ACH payments possible. The ACH network is a system that facilitates electronic funds transfers (EFT) within the U.S. The National Automated Clearing House Association, or Nacha for short, developed the technology behind ACH. Currently, Nacha continues to set guidelines and oversee the expanding ACH process. Accept debit and credit cards with safe, secure, and convenient Payment Solutions from Chase anywhere you do business – online, in-store, and on-the-go. Visit our Developer Center to find Payments APIs, developer tools, and documentation.

Pros of accepting ACH payments

Here are the benefits and drawbacks of using ACH payments in your small business. Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user accepting ach payments reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services.

accepting ach payments

That summer, Chase sent him a letter saying his accounts would be shuttered. “They were aware of my study, work and family history but still closed my account after almost 10 years,” he said. Mr. Ladipo, now 30, had banked with Chase since he moved to Ohio in 2010 for college. Citi declined to comment, even though Ms. Potter granted the bank permission to speak about the couple’s accounts.

The benefits of ACH payment processing

This straightforward and simple process makes it easier for clients to pay you, and makes it faster for you to receive payment. When it comes to determining which types of payment options you want to offer your customers, convenience and speed are priorities. But you’ll probably want to accept online payments for all the opportunities and convenience they add to your business. You can choose which payment methods to accept—just activate your preferred method, or activate several and give the client options.

Even if your client pays promptly via check, it still takes time to mail, receive, and process it. There are plenty of opportunities for a check to get lost or require time-consuming manual error corrections. Invoicing platforms including QuickBooks, Zoho, Xero, Wave and Harvest offer integrations with major payment service providers, including PayPal and Stripe.

Cost of Accepting ACH Payments

An employer that uses direct deposit authorizes payments from its bank account to its employees’ bank accounts via the ACH network. ACH plays an important part in how consumers manage their finances on a daily basis. Businesses can also use the ACH network to receive payments from customers, send payments to vendors and transfer money to and from accounts at different banks.

The ACH Network “batches” payments during the day, eventually sending money to the appropriate bank of the payee, though it does not send payments instantaneously. Instead, payments may take up to 1-2 business days for processing and receipt by the payee. Even though ACH requires a little processing time, it’s still faster than processing a paper check.

When this happens, you’ll have to double-check your customer’s account number and routing number to ensure that your bank accounts are connected. Accepting ACH payments will add another payment method for your small business customers. If you’re using the wrong credit or debit card, it could be costing you serious money.

  • A QuickBooks survey found 75% of employees prefer to receive their pay via direct deposit.
  • Look at the ACH payment processing fees, too, and make sure they compare favorably to credit card processing fees.
  • Setting up your business to accept ACH payments gives you an alternative to credit cards, cash or checks.
  • The Office of the Comptroller of the Currency advises banks and service providers in the ACH network to minimize risk with strong security systems.
  • Using a state-issued identification card and a check from the Department of Corrections, he opened a checking account at Chase.

Here’s what you need to know about accepting ACH payments at your business. GeographyACH transfers are available within the US only, but wire transfers can be sent internationally. An ACH credit means money is being “pushed” from one account to another. The payer in an ACH credit transaction authorizes their bank to move money from their account to someone else’s. Transactions on the ACH network are categorized as either ACH credit or ACH debit transfers, depending on which way the money moves.

Why some ACH payments can be rejected?

A small fee will be charged to your business, just like when you accept a credit card. ACH payments are deposited into your bank account within 3-5 business days. This is because it takes three business days for transactions to be verified. So, for example, if an ACH transaction is initiated on a Monday, it will be processed on Tuesday and Wednesday, settle on Thursday, and reach your bank account by Friday. While the exact amounts vary, ACH payments typically have lower processing fees than other payment forms like credit cards.