Businesses are accustomed to accepting payments three ways: check, cash, and credit or debit card. Most businesses are overlooking the benefit of another rapidly-growing option: ACH payment processing, a form of electronic check payment where a business charges a bank account directly.
ACH payments are gaining popularity across the financial services industry as more attention has been given toward advancing same-day ACH payment technology. This initiative continues to gain momentum after organizations like NACHA (National Automated Clearinghouse Association) have paved the way for funds to move along the ACH payment rails faster; which, in turn, has opened the doors for businesses to greatly benefit from advancements in new technology.
Benefits of ACH Payment Transactions for Growing Your Business (and Your Customers)
While payment processing fees are considered the cost of doing business when thinking about scaling your business and your customer base, providing a payment option that reduces transaction costs matters significantly for growing revenue.
Because ACH payments are processed through an electronic network in large batches of both credit and debit transactions, it can be a lower cost method to the standard of processing payments. Traditionally, the drawback was the built-in payment settlement delay, but with same-day ACH initiatives underway, that problem is nearly eliminated.
Lower Transaction Fees
The obvious benefits of ACH payment processing are the lower transaction fees. On average, processing a check costs $1.22; traditional credit card transactions typically tack on 2.4-3.5% percent per transaction. ACH payment transactions, however, usually cost less than .60 per transaction because of the batch processing.
More Convenient Payments
ACH payment processing options are also a sure way to offer a more convenient way for your customers to pay. Because you and your customers want payments to settle faster, offering ACH payment can boost customer loyalty and increase customer retention.
For merchants that process recurring billing with their customers, ACH payment, particularly same-day ACH, can be automated and made simpler from start to finish.
ACH Payment Processing is Fast
Because ACH payment transactions may be processed through your bank faster, it can provide reassurance that you’ll be paid faster. And, because ACH payment transactions can’t be disputed as easily as a credit card, there is also a better chance your business will get paid without any unnecessary chargeback hassle.
For ACH payments, your business can receive a notification instantly if there was an issue with payment. Since credit card disputes increase the time between when the transaction was made and when funds are available in your account, ACH payment eliminates that worry.
Increased Security Measures
Beyond the potential of being cheaper, faster and more convenient, ACH payment processing transactions can give you (and your customers) peace of mind that transactions are secure. When customers make an ACH payment, it processes through a secure system that is encrypted. From there, the payment is processed in a safe, secure environment, leaving your customer’s credentials protected — and your business’s profits safeguarded.
That can be an easy win-win for both you and your customers — and a sure way to grow your payments and increase revenue.
Anna Kragie is a content contributor for Payline Data. She previously wrote for PYMNTS.com, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.
