But ACH is most beneficial for businesses that offer subscriptions, have recurring payments, or B2B companies that sell high-ticket items or services. One of the biggest draws to using ACH is the lower processing costs in comparison to credit and debit card payments. accepting ach payments The savings you receive in lower fees come at the expense of longer processing and settlement times. PaymentCloud is at the top of the list of Merchant Maverick’s best all-around high-risk payment processors for its fair treatment of hard-to-place businesses.
While the exact amounts vary, ACH payments typically have lower processing fees than other payment forms like credit cards. Payment processors usually charge a flat ACH processing fee of less than $1 per payment. The more transactions you process, the lower the cost to your business, especially when compared to credit card fees. ACH payments are usually a better choice for businesses than paper checks and wire transfers, especially when processing a high volume of ACH B2B payments.
What is an example of an ACH payment?
Make sure you factor in that time when setting up a transaction, so there aren’t any surprises later on — especially if you’re making a time sensitive payment. Cost is the main advantage of ACH transfers, especially when compared to a wire transfer. If you later notice an error or suspect fraud, the payment can be tracked and reversed. This is a great feature — and not something you can do with wire transfers.
- An ACH payment is an electronic transfer between bank accounts that is handled by the ACH network.
- As attractive as the pricing is from National Processing, be aware of the terms.
- The money won’t land in your account on weekends or federal holidays when the Federal Reserve system is closed.
- The downside is these services tend to be more limited and not as easily integrated into your point-of-sale processes.
- Including ACH in your payments arsenal can help round out your offerings so you don’t miss out on customers who prefer this method.
Where it gets especially costly is high-value or large transactions due to returned payments. Some processors require you to pre-fund accounts if your average ACH transaction is above a certain threshold. On top of that, you’re responsible for return fees and can be out a sizable amount of money, especially if goods or services were delivered. The average time to move and settle standard ACH payments is approximately two to five business days, but it can take up to 10 depending on the bank. For example, Finix’s default timeframe for settling ACH direct debits is 5 business days or T+5.
Platforms That Let You Accept ACH Payments
To accept ACH payments online, the best option is to use a payment gateway. You can enable ACH payments on your payment gateway provider for an extra fee. Beyond your payment provider, you might also be able to accept ACH payments through your business checking account.
With Helcim, you get everything you need to accept credit card payments, plus high-quality support from real humans. An ACH is almost always cheaper than a comparable credit card transaction and often cheaper than a comparable debit card transaction. ACH transactions may even be free in some cases (typically ACH credit transactions are initiated through a bank or credit union). ACH can be a great low-cost alternative to credit cards, but it’s not always an ideal solution. For example, ACH is well-suited for billing subscriptions and B2B transactions but can be cumbersome to use at point-of-sale.
Business to business ACH payments are easy to manage
Transfer times differ due to how the ACH and Fedwire networks respectively settle out transfers. NetworkACH payments use the Nacha network to travel from the issuing account to the receiving account. The RDFI, despite having “receiving” in its name, is not always the bank that receives the ACH payment funds—it receives a request to initiate funds transfer via the ACH network.
- Business-to-business (B2B) ACH transfers are transactions between two companies, rather than a company and a consumer.
- You’ll need to provide relevant business information, such as your company’s legal name, address, tax ID, and banking details, to complete the account setup process.
- While cash, checks, and credit cards are suitable for virtually all customer payments, the same is not true for ACH payments.
- Options like cards, B2B invoicing, bill pay, and subscriptions are more suited for e-commerce.
- Payment processing can be daunting for small business owners, but it doesn’t have to be.
- Regularly review and update your payment processing procedures to align with evolving compliance requirements and industry best practices.
So a $100.00 payment would incur an $0.80 fee; any payments above $625.00 would cost $5.00. This pricing model is especially useful if you routinely charge customers large amounts on a recurring basis. If you’re among the 93% of Americans who receive their paychecks through direct deposit, there’s a good chance it’s being sent as an ACH transfer. If your paycheck is automatically split and deposited into two or more accounts when you get paid, that’s called “split deposit.” Split deposits also happen via the ACH network.
Plus, why not incorporate a pricing strategy that offers a discount for ACH payments? You can also increase your profit margin thanks to time savings and lower fees. Even if you already have a merchant account for credit card sales, you’ll have to set up a separate account for ACH payments. This should not be an onerous amount of work to keep track of, but it is another financial asset you’ll have to monitor.
- The main difference is that an eCheck is a digital version of a paper check that’s predominantly used for one-time payments and no banking data is stored.
- Within the Direct Payment category, there are two main types of ACH transfers, known as ACH Credit and ACH Debit.
- This entire process is overseen and regulated by Nacha, the National Automated Clearing House Association.
- Keep in mind that same-day ACH payments are unavailable for international ACH transactions.
- If a customer chooses to pay via ACH bank transfer, they will be directed to a safe and secure portal to log onto their bank and select an account for payment.
- Payment Depot doesn’t add a percentage to wholesale interchange rates.
