Why ACH is Important

For larger amounts, some merchants or customers may prefer to transfer money from a bank account, rather than use a credit card or accept a check. This is where ACH comes in. It stands for Automated Clearing House, and it’s a secure interbank system for electronic money transfer. It can also be a convenient payment method for subscriptions and instalments.

Unlike EFT (Electronic Funds Transfer), ACH payments are only done at certain times of day. Most banks do one ACH batch in the morning and another in the afternoon, so cash generally arrives in the recipient’s bank account the same day or the following business day. The reason for these set times is because they’re done in bulk.

Rather than processing one customer’s electronic transfer request, the bank collects all the ACH orders in the queue, lumping together the sums from multiple customers and transferring them in a compiled batch. This saves time and cuts down administration costs, making it cheaper for the bank – and for the business receiving the ACH payment.

Benefitting from the bank

Because ACH payments are done from bank to bank, they have additional security protocols that don’t apply to other payment methods. The other advantage of ACH – at least for your business – is the virtual elimination of chargebacks. Bank payments of this type are much more difficult to reverse than many other online payment methods. This means that dissatisfied customers usually have to appeal directly to you, which gives you a chance to correct the error and win their trust back–without getting penalized or blacklisted.

For more information on ACH and its importance, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.