ACH applications rising up for business owners, even while the processing time runs slightly slower than credit card transactions. ACH stands for Automated Clearing House. We know it sounds complicated. But believe us, it really is quite simple. In easy terms, ACH payment solutions are just one of the several means of electronic payments/transactions. They usually take place between two business bank accounts within the country. These transactions are made possible through the reliable network built by the National Automated Clearing House Association, aka NACHA.
However, ACH technology, unlike other modes of electronic transfer, like wire transfers or credit/debit card transfers, offers more flexibility in specific ways. Let’s discuss the main benefits of using it.
Every electronic payment method has its pros and cons. Here are a few reasons why you should consider ACH over other payment modes.
ACH transfers can be stopped more easily than wire transfers: Wire transfers are almost real-time. In most cases, the banks process them on the same day. ACH debit transactions can take up to 2 to 3 business days (although they are getting faster with advanced ACH applications and offer same-day processing in several cases).
Canceling wire transfers is exceptionally inconvenient and almost impossible since they are quick. Once the receiving party gets the funds, there is no way you can cancel it. ACH transactions can be stopped more conveniently since the processing itself takes longer.
Lower processing fees: ACH payment processing is by far the cheapest electronic mode of payment available on the market. Wire transfers, as well as credit and debit card payments, are significantly costlier compared to ACH transfers.
Easy reversals: There is almost no way you can reverse a wire transfer or a credit/debit card transaction after it is complete. However, you can easily submit a request for a reversal in case of an error while processing payments through ACH.
While ACH transfers work for businesses of all sizes, they are more valuable to some users. Let’s see who should ideally use ACH payments as their primary mode of transaction.
Wire transfers and card transactions are great for a convenient one-off small purchase. However, you will be better off with an ACH technology to move money in most other cases.
The digital revolution and internet era have brought forth several excellent ACH applications. Let’s see why you should consider using such applications for your business.
Reliable third-party ACH applications make sending and receiving ACH and credit card payments simple. They act as a front-end for your business’s payment page and help you accept eChecks as well as direct transfers effectively. They eliminate the delay caused by paper checks.
You can use these ACH applications to:
Although the ACH processing time is not the best, the technology offers several key benefits for businesses that regularly deal with high transaction volumes. Every day, an increasing number of financial institutions and business owners rely on the ACH process to save and transfer money efficiently.
NACHA is also developing state-of-the-art modernization for the technology to prevent fraud and decrease the ACH processing time. With an ever-increasing speed of transactions, ACH will soon act almost similar to other real-time payment solutions. Want to know more? Schedule a 15-minute call with payment processing experts here!