What is ACH Payment Processing?
ACH Payment Processing
ACH payment processing is the implementation of an electronic bank transfer between the payer’s and recipient’s bank accounts through the Automated Clearing House network of financial institutions regulated by Nacha.
ACH payment processing is used for recurring payments and one-time payments instead of a paper check, bank transfer, credit or debit card.
The ACH payment method is a type of electronic money transfer (EFT).
The ACH network eliminates the need for paper checks. Instead, it handles two types of transactions: Direct Payments via ACH and Direct Deposits via ACH.
How Does ACH Payment Processing Work?
ACH payment processing works when ACH transfers go through a payment processor using either ACH credit or ACH debit. ODFI in the ACH network is a depository financial institution-sender, and RDFI is a depository financial institution-recipient. ODFI transfers files to the ACH operator on the same day.
The payer can use electronic checks for direct ACH credit to transfer funds to the recipient’s bank account. Or the payer can allow recurring payments from his bank account via ACH credit by filling out the authorization form of the payee.
When a financial institution withdraws funds from a bank account at the request of the payee, it is an ACH debit.
In order to process an ACH transaction for direct payment and direct deposit, the payer must provide the ACH network with banking information, including contact information, route number and account number of the payer and recipient.
Bank accounts can be a designated trading account or a checking account, or a savings account.
The automated clearing house allows payers to choose either the standard ACH processing time for the next day (which can take from 2 to 4 days), or faster Same Day ACH processing for ACH settlements.
Same Day ACH uses four time windows with the time of Nacha shutdown, depending on when ACH transactions are submitted to the ACH operator from ODFI.
Standard ACH payments are often referred to as “three-day financing” because 72 hours is how long it usually takes to process ACH payments. It is during these three days that the verification process takes place.
The purpose of the check is to make sure that there are funds in the client’s account; this reduces the risk that the ACH processor will credit funds to your account and then be forced to debit them from your account due to the lack of funds in the client’s account.
The Same Day ACH actually means the same business day if an electronic payment is requested during the first three time windows, or the Next Day ACH if an ACH payment is requested after the set shutdown time. Next Day ACH means the next business day.
Starting from March 18, 2022, Nacha will increase the limit on one transaction for the Same Day ACH to $1 million from $100 thousand.
Benefits of ACH payment processing
There are many reasons why entrepreneurs should use ACH payment processing:
- Providing payment options for your customers is always beneficial for business, and also makes the customer more loyal to your company. Offer your customers an alternative to credit cards and checks.
- Offer lower fees – Among the different types of payments,
- ACH payment processing offers the lowest processing fees. ACH payment processing will cost your business less than processing payments using paper checks or bank cards.
- With the check processing service, payments become safer and faster.
- Fewer rejections – ACH payment processing has no expiration date like credit or debit cards.
- When ACH checks are processed, payments are sent on behalf of customers, which saves time on recurring payments.
- Convenience – No more need to store paper invoices and paper receipts. There is no need for constant trips to the bank.
- With ACH payment processing, businesses can accept checks as easily as credit cards.
How to Make an ACH Payment via the ACH Network?
Creating a business environment that supports ACH transfers is very simple. Most sellers already accept them, especially online businesses. These payments are safe and reliable.
First you need to decide whether the ACH payment option will be one-time or recurring. A one-time ACH payment can be made as an ACH debit or credit transaction.
After you provide your ACH operator with information about the supplier’s account, you will be able to transfer funds to his account electronically.
You must give permission to the provider to electronically withdraw funds from your account.
If it will be a recurring payment, you must provide permission for the date and amount of funds that can be withdrawn.
If the amount differs from one payment to another, this will be indicated on the ACH registration form.
Make payments via the ACH website:
If you buy goods from sellers on the Internet, you can make payments via the ACH WEB method, and not via PayPal.
Most merchants prefer WEB ACH payments instead of PayPal payments due to PayPal’s high transaction fees.
Accepting PayPal payments costs the seller a certain percentage of the total transaction amount.
For example, if the percentage is 3%, then PayPal will withhold $3 for every $100 transaction.
With payments via ACH WEB, the seller is likely to pay only from 25 cents to $5 per transaction, which is much cheaper for large transactions.
Use computer or terminal payments:
For businesses that usually process payments by phone or mail, a virtual terminal or processing service can be used to process ACH payments. Access to the virtual terminal can be obtained using a computer or mobile device. You enter the account number and the supplier’s routing number and initiates the transaction.
Which Businesses Should Use ACH Payment Processing?
Companies of all sizes, including small businesses, should use ACH payment processing and accept ACH payments from customers as it is easy to use and costs less than other payment methods. Choose the best ACH payment processing solutions for your business.
It’s important to take the time to look at the big picture. For example, processing a receipt costs nothing.
But how much do you pay a person for going to the bank every day? A 360-degree business overview will help you make a decision.
Best ACH payment processing
Wellcoinex provides innovative and modernized check processing services that provide high flexibility in accepting electronic check payments, reducing overhead costs for various things, such as daily trips to the bank, paperwork, printing checks, etc.
Our ACH payment processing services allow you to withdraw funds from the client’s checking account, regardless of whether the receipt is physically present.
With Wellcoinex E-check payment processing services, you will have flexible payment processing capabilities that allow you to accept electronic check payments. This will allow you to increase sales and reduce the cost of paper receipt processing services.
With check processing services, you will never have to give up a paper check as an inconvenient payment method for you.
Make payments easy and simple by integrating a cheque reader to deposit electronic cheques into your bank account.
The ACH payment processing service from Wellcoinex is convenient, efficient and easy to use. We provide a high level of protection against fraud and invalid checks.
Great services combined with first-class technology to provide you with the best ACH payment and check processing services – that’s what Wellcoinex is.
Increase your sales with minimal risk with our receipt processing service! Contact our team to learn more about ACH and credit card payment processing services!