All major financial institutions and banks now offer the ACH payment method to their customers. These methods help the customers automate their EMI and bill payments seamlessly. If you are a bank, lender, or financial institution owner, you educate yourself more about the ever-growing ACH technology to offer the best possible service to your customers.
Still not sure if you should go the extra mile to offer ACH payment methods to your customers?
Here are 8 reasons why you should consider offering the ACH payment method to all your customers today.
Customers Prefer ACH Payments
The customer is the king! Many individuals and business owners are adopting ACH applications for payment processing. Quick, hassle-free transfers, low transaction fees, and automated transfers are some of the key reasons why they prefer ACH solutions over other modes of payment.
Sell Low Processing Fees
Gain a competitive advantage over other banks and financial institutions that have not adopted ACH by offering a convenient payment method that charges a lower processing fee. ACH is one of the cheapest ways to transfer money without incurring a massive transfer fee. Regardless of the total amount, ACH payments usually cost between 25 to 50 cents flat fee. Comparatively, wire transfers and card payments typically cost 2-3% of the total amount as a transfer fee. You can use lower processing fees as a unique selling point to attract more customers.
Market Automated Payments
Late payments affect an individual’s credit scores more than anything else. Even a couple of late EMI, loan, or credit card bill payments can impact your credit scores negatively. It may take several months, or in some cases, years, for the credit score to recover to reasonable levels. A low credit score directly impacts the interest rates at which you can get loans and the availability of premium bank account services. So, individuals need to be mindful of making their payments regularly.
Unfortunately, only a few people are hands-on with money management and bills. Either they find bill payment cumbersome or too complicated. For such customers, automated payments by ACH are a boon. These customers can pay their bills without manual intervention with automatic recurring payments. As a lender, you can market your lending services with an option for automated transfer of funds. After adopting the ACH technology, you can accept payments from the savings accounts of your customers directly so that they do not face any additional late payment fees.
Offer Higher Security
Most heavy business-to-business transactions occur on the ACH network because of the low processing fee and enhanced security aspects. With multiple levels of authorization, ACH payments are some of the safest modes with which you can transfer funds quickly. You can say that your payment methods are protected by state-of-the-art technology by offering the ACH technology as an option right at the beginning of the loan origination process.
Reduce Human Error
ACH payments not only reduce the effort at your customers’ end but also help you save time. Moreover, since you can automate ACH credit payments from your customers, you can reduce any room for human error. Instead of reminding your customers to pay you back regularly, you can use ACH to collect the payments automatically.
Note: For seamless ACH debit from your customers’ bank accounts, you can have them complete the necessary authorization right at the beginning of the loan application process. Make sure that they select the suitable mode of payment (recurring) while filling out the authorization form in the first place.
If for any reason, a payment from a customer fails, your payment processor will send you a notification stating that your ACH credit transaction failed. You can forward such cases to your collections team for a follow-up.
Remove Friction
Let’s say that your customer decides to pay you back through paper checks. In such a scenario, they need to write a new check every month, mail it to you, and wait for confirmation. If they make a mistake while writing the check, you cannot process it. You will need to ask them for another check which will again take a few business days. You can use ACH solutions to avoid such unnecessary friction altogether. Both you (as a bank) and your customer can save time and money by processing the payments through ACH.
You can now receive and transfer funds with ease across your entire customer base and remove unnecessary friction using consumer finance payment processing.
Offer Payment Through Multiple Modes
If you are wondering how to pay with ACH, you can partner with any of the top Nacha-preferred partners for help. Banks and financial institutions often partner up with third-party payment processing companies to offer the ACH transfer facility to their customers.
The best part about partnering with such a third-party vendor is that you can offer your customers an option to pay through multiple modes. Popular financial institutions provide their customers an opportunity to pay their dues using a debit card, credit card, ACH, paper checks, wire transfers, etc. The convenience of paying through multiple modes will surely help you attract more customers. The best third-party payment processors offer multiple modes and not just ACH. So, these vendors can be the one-stop destination for all your customers’ payment processing needs.
Increase Revenue Share Per Customer
Apart from attracting a more extensive customer base, you can also benefit from an increased revenue share per customer. The best third-party payment processing companies like iCheckGateway.com also have a revenue share program. iCG pays you directly for each lead/customer you send their way. Therefore, helping you increase your wallet share per customer.
Want to learn more about partnering with iCG to accept payments via ACH and credit card payments technology? Reach out to us today to get an unparalleled service!
Date originally published: January 26, 2022