Last Updated on May 20, 2021 by MoneyVisual
With the emergence of the Internet and the subsequent popularity of the online space, several processes and tasks have either gone online or provided online alternatives for convenience and ease. If you regularly deal with fund or money transfers, then you may have heard of automatic clearing house (ACH) payments. This method allows you to make payments and transfer money between accounts electronically.
If you have ever paid your bills online using your bank account, then that is a prime example of an ACH transfer. Essentially, ACH payments are those where you give an institution or company the authority to debit directly from your bank account for payment purposes. The electronic payments go through the ACH network, and the money moves from one account to another with the help of a centralized system.
ACH payments have been existent for a long time now that you might have already made them without realizing it. They are an excellent alternative to credit cards and checks, and also allow for faster payments since ACH processing works much quicker than standard processing for checks. ACH payments are so versatile and can be used in many instances, but there are several reasons why your business should make use of them.
Customers often have to deal with the troubles of credit card charges or check transaction fees. For the latter, it can also be time-consuming for them to get and write a check, then send or mail it to you on time. ACH payments essentially eliminate the hassle of doing all these by wiring the money electronically to you. As a result, transaction fees are also at a minimum since the funds are directly transferred from one bank account to another.
ACH processing is known to be faster than regular check processing, making them an excellent way of streamlining your accounting process. Furthermore, technological advancements have made same-day ACH transfers possible, as long as the transfer is made within the cutoff time that is provided by the clearinghouse association. With this, you can expect quick access to cash and efficiency in the payment procedure.
ACH transfers provide an easy platform for businesses to accept long-distance payments or those coming from remote locations. If your customers prefer not to give their card information or have no credit cards, then this method will help solve that problem.
As with most online platforms, ACH payments are convenient for both you and your customers. Your customers no longer have to deal with the trouble of writing the checks and sending it to you, while you no longer have to worry about credit card expiry or bouncing checks. Customers also do not have to worry about credit card charges since their payments will come directly from their bank accounts.
ACH payments likewise make it easier for you to manage your finances since you can easily make use of tools to track and report all the payments. Several platforms will help you track the status of payments and generate reports to help you organize your transactions and customer data.
Back in 2016, ACH transfers had already risen to about 5 billion bank transfers, which was a substantial increase from the previous year. This number just shows how large ACH is growing as a payment system in different parts of the world.
Whether you are doing a person-to-person (P2P), business-to-consumer (B2C), or business-to-business (B2B) transaction, you can benefit from the convenience of ACH transfers.