What is High-Risk ACH Processing?

As someone who runs a small business that accepts credit cards online, it’s wise to know about high-risk ACH processing and how it could affect your business. You’ll have to plan ahead if you want to find payment solutions to this obstacle in creating a sustainable merchant platform for the online portion of your business.

People want to use ACH debit in this day and age, especially when everyone’s trapped inside during the pandemic lockdown, and face-to-face transactions are being de-emphasized by businesses. However, your business needs to make sure that managing high-risk ACH processing is part of your game plan.

What is ACH processing?

Allowing customers to use ACH debit in your business will speed up the payment processing for them and give you advantages over the businesses you’re competing with whose systems are stuck in the past. ACH or “Automated Clearing House” payments include most electronic payments made automatically. They are set up in advance by giving banking or payment information to a service so that they can automatically withdraw the funds.

Using ACH debit instead of manually entering credit card information or writing checks for payments like movie streaming subscriptions and utility bills has advantages and disadvantages for both consumers and businesses.

Benefits of using ACH debit

ACH payment processing is useful for those who forget to make payments and are tired of paying late fees. It expedites payment processing and eliminates the need for inconvenient and less secure forms of payment. This means you no longer have to mail checks for subscription fees, worry about them getting lost or stolen, or paying postage.

It is also a secure payment method since the information drawn out of the customer’s bank is processed through security measures and firewalls before being transferred, compared to a check in the mail.

The main disadvantage for consumers is a loss of control. Since ACH debit transactions often withdraws funds automatically, customers may end up paying for a service they no longer want or even accidentally overdrawing on an account. If the consumer stays on top of it though, ACH debit is convenient and safe.

What is high-risk ACH processing?

High-risk ACH processing involves transactions made through ACH debit transactions to a business that is considered high-risk, because of factors that can include the business category (such as such as gambling or pharmaceutical), the physical location of the business (such as in a country experiencing a civil war, for example), the creditworthiness of the business or its owners, typical transaction sizes, and the total transaction volume, among other factors. If there is a high likelihood that payments will be disputed by customers, the business is considered high-risk.

These factors can make it more difficult to secure ACH services. Businesses that have been categorized as high-risk can seek out payment processors that offer high-risk ACH processing in order to give their customers the fast and reliable payment services they expect.

The Takeaway

ACH debit is a great option you can offer your customers to get your payments processed on your website. High-risk businesses may need to manage options differently in order to find a payment processor that will work with their needs.

To find the right online payment service products and plans for your business at the lowest price anywhere, whether you’re business is classified as high-risk or not, contact Charge.com by visiting the website or calling (888) 924-2743.

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