Keeping customers engaged and happy is a constant challenge for today’s entrepreneurs. One often overlooked way to boost client satisfaction is to furnish them with multiple choices when it comes to how they pay for products and services.
In addition to well-known options like digital wallets and debit and credit cards, ACH payments furnish a new level of versatility and choice in the funds transfer arena.
ACH payments defined
ACH payments originate from the Automated Clearing House Network, which is responsible for the transfer of funds between U.S. financial institutions. Types of transactions include business-to-business, government, and consumer.
Using this system enables payments to happen without the need to exchange funds via cash, paper checks, wire transfers, or card networks.
Advantages of ACH payments
Encouraging customers to pay via bank transfer brings several benefits to your business. For one thing, per-transaction fees are lower than you would find with other payment types. Moreover, security is enhanced because fewer parties have direct interactions with the data.
Speed is another compelling upside to ACH payments. Employees and other businesses receive their money faster than they would with paper checks. Additionally, using ACH involves utilizing fewer staff resources because transactions can be processed in batches.
Finally, flexibility is enhanced in two major ways. On the customer side, funding for the payments can come from both checking and savings accounts. For the merchant, it becomes possible to easily set up recurring payments.
This allows a set amount of money to be withdrawn from a bank or credit card account on a specific date for a predetermined amount of weeks or months until the agreed-upon date arrives.
This arrangement makes for predictability, smoother cash flow and a more positive customer engagement and retention experience.
Are ACH payments right for your business
Without a doubt, every business is unique, possessing its own set of customers, brand identity and goals. Therefore, you as an entrepreneur must come to your own conclusions about whether it is in your best interest to contact your in-house merchant services provider about configuring your systems to take ACH payments.
On one hand, this arrangement provides a host of benefits. These include speed, added convenience, enhanced accuracy, lower costs than the traditional card networks charge, and the greater security that the ACH network brings.
Additionally, businesses can use these seamless payments to offer recurring billing to their customers, leading to advantages for buyer and seller alike.
On the other hand, ACH comes with its downsides. This payment type can only take place between U.S. accounts. Additionally, because ACH transactions are processed in batches, they can take up to three days to complete although some are eligible for same-day processing.
Additionally, some banks may impose daily, weekly, monthly, or per-transaction limits on how much money can be transferred. Finally, since the process is automated, there is a greater likelihood of payroll fraud.
Only you can determine whether incorporating ACH payments into your business makes sense for you and your customers. Regardless of your final determination, ACH has come to represent a reliable, safe, and fast way for funds to be exchanged that goes beyond the traditional avenues.
