Most business owners know that ACH payment processing can help you get paid faster and save you money on fees. But did you know that accepting ACH payments can help you better manage your cash flow as well as help you optimize your business? After all, a payment gateway can help you save time and money when it comes to managing your business, and that’s something that any business owner can benefit from.
It’s all possible with ACH payment processing, which is essentially a network for processing payments electronically from one bank account to another. If you use direct deposit to pay your employees or vendors, you’re likely already using the ACH network to send money — why not use it to receive money, as well?
Here are some additional ways that ACH payment processing can help your business.
Lower Your Transaction Fees
One of the most beneficial reasons to use the ACH payment processing network has to do with processing fees. If you’re spending too much on fees and you’d like to lower what you’re paying for credit card payment processing and other transactions, ACH payment processing can help you substantially reduce those transaction costs.
And we’re not talking about a nickel or dime here and there — you could save a dozen dollars or more on a $500 transaction and pay less than a dollar versus more than $10 for the same payment. The best part is that the transaction is also instant rather than the multi-day delay that’s common with other types of payment processing.
Increase Convenience for Customers and Yourself
While it’s great that you’ll be lowering the transaction fees associated with manual and long-winded transaction methods, ACH payment processing is also more convenient for you and your customers. Forget about those paper invoices and taking forever to debit a monthly bill — ACH processing is faster and more efficient for everyone involved, meaning that payments debit faster with instant payment processing, and there’s no double-checking needed. With all that extra time that you save, you’ll be able to spend more time strategizing about your business, not chasing down account information in random bits of paper or in an email somewhere.
Make Recurring Billing Easy
One of the most difficult parts of traditional billing and charges is automatic, recurring billing. Because there’s no system in place to deal with recurring charges, many business owners have to manually trigger them, which takes both time and resources. Multiply that by dozens of accounts and you could have a bonafide billing problem on your hands.
But with ACH payment processing, recurring billing is easy, not a chore. With a merchant account payment processing platform, just set up the billing schedule, plug in the account information and set the rate and frequency — that’s it! Unless canceled, the amount will be credited to your account at each interval without a need for a manual interaction. Beyond the payment itself, your processing platform will also allow you to automatically invoice and track the payment, reducing the need for babysitting throughout the process.
Enable Preferred Funding
It goes without saying that not all transactions are equal. Some carry higher priority, and paper checks and other manual payments are commonly processed after other types of payments. However, ACH payment processing rules means that electronic payments have priority and are processed first, helping your ACH payments get processed before any paper checks and other types of payments, reducing the time it takes to get paid.
For accounts that may have spent more than the funds available, it can also help prevent chargebacks and bounced payments if the ACH payment hits before a paper check that brings their account into the red — even if the charges were both processed at the same time.
Increase the Chances of Getting Paid
While most payment processing is relatively straightforward, there are reasons why you may not get paid. If the account or routing number doesn’t match up for some reason, it could delay or jeopardize the payment. Other reasons for not getting paid in a timely manner include an authorized date in the future or processing a payment prior to the authorization date, as well as other issues with authorization.
For credit card payment processing, disputes can also happen for a variety of reasons, such as hitting a limit, suspicions of fraud or an issue with the credit card processor. But with ACH payment processing, you won’t have to deal with unilateral delays and other roadblocks that prevent you from receiving or accessing the funds that have been rightfully sent to you. If there’s an issue with a payment, you’ll get an immediate notice so that you can plan around it and allocate time to take another look. For most payments, they’ll deposit instantly, giving you immediate access to your funds.
Safer and More Secure
The reason most payment processing is fraught with delays and substantial fees is because these hurdles are effective in helping to fight unnecessary charges and fraud. By delaying payment processing, the processor has the chance to review the payment to determine that everything’s on the up and up, only pushing it through once the required checks have been met.
But with ACH processing, the information is verified ahead of time, allowing for a condensed payment window that’s measured in seconds and minutes, not hours and days. As long as the routing and bank account numbers match up, the payment will be initiated on the payment authorization date at the defined interval.
Another benefit of ACH payment processing is that everything is encrypted, including account and routing numbers, which is more than we can say for paper checks and other types of payment processing. Additionally, paper checks may end up in the hands of hands of more than a few associates, and the check itself can end up being placed in an unsecure area — an impossibility with an ACH payment conducted securely online.
Be Kind to Mother Earth
The amount of paperwork that’s typically required for a traditional payment can be mind boggling. But with ACH payment processing, you can cut that paperwork down to zero and help do your part in support of Mother Earth. After a transaction is done all that paperwork is just taking up space anyway, and with all the other benefits it only makes sense to cut out that extraneous paperwork while reducing the burden all around.
To learn more about how our all-in-one payment gateway solution can help you process payments, approve loans and issue eChecks without high reserve requirements and steep escrow fees, check out the TranscendPay platform.