When your customers are paying for your products or services, they have multiple payment avenues. They can pay in cash, check, credit card, or debit card. Lately, regular customers are opting to pay through ACH (Automatic Clearing House). This means the cash moves from their bank to yours via electronic transfer. It’s a cheaper method, but it’s slower too.
The reason ACH costs less is it’s less easily reversible than credit card transactions, so there are lower risks of penalties. It also eliminates the worry of credit card fraud. However, it takes longer than credit card transactions, and it’s a bulk payment system, so it’s best for regular payments like monthly bills, mortgage or car payments, and insurance premiums.
Just like other payments to your business, ACH requires a merchant processor to mediate between the customer’s bank and yours. Find a good merchant processor that covers check, cards, and ACH on the same platform. Some processors are happy to accept high risk businesses.
How to set up your ACH
Confirm whether your current payment processor accepts ACH. If not, consider getting a new one. Having all your payments centrally processed offers better security and convenience, and it usually saves you money.
Contact your payment processor to let them know that you want to accept ACH. (Of course, if you don’t already have a payment processor, you’ll have to find one at this point.) Once you provide any requested information to your payment processor, they will take it from there, and add ACH payment capability to your account. Now you can sit back and wait for your customer payments to arrive, usually within 24 hours of your customer authorizing the ACH payment, and at relatively little cost to you. You can also place banners in your physical store that confirms your ACH acceptance.
Less hassle and better security
Your regular customers have already established trust with you, so it may be difficult to handle issues like forgotten bills. The beauty of ACH is it makes life easier for both of you. It can be automated so that your customers always pay and your cash comes in good time. It also cuts costs for both you and your customer and it can eliminate credit card fraud.
The only downside of ACH is the transfer period. However, with the right merchant processor, you could get your cash even faster than a credit card transaction. It’s possible to get in within one day or less, so be sure to pick the right processor.
For more information on accepting ACH payments from customers, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.