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What is ACH Payment Processing for Businesses?

CardChamp is known for helping businesses accept credit cards. However, a little known fact is that we also assist businesses in accepting ACH payments. In fact, many new CardChamp customers have elected to add on ACH payment processing to their standard merchant services account. Let’s see if ACH payment processing is a good fit for your business.

 

How Does ACH Payment Processing Work?

Unlike credit cards, ACH transactions transfer funds from the customer’s bank account to the merchant’s bank account through the ACH Network. There is no physical check involved in the process of ACH payments. Businesses which accept recurring or customer not present payments find accepting ACH transactions most helpful in comparison with others. Customers can make payments through ACH Debit or Credit. ACH Debit is used in recurring billing scenarios with autopay, versus ACH Credit, which are for one-time transactions.



How will Accepting ACH Payment Processing Benefit My Business? 

ACH payment processing helps businesses track expenses and cash flow, ultimately saving time and reducing labor costs. Since making an ACH payment is free to customers, it is a better alternative to wire transfers. Most importantly, in comparison to accepting credit and debit cards, the cost is significantly lower.

 

Eliminate the Hassle of Expired Credit Card Information

Merchants which store customer’s credit card data know the pain of dealing with an expired credit card or when a customer changes card issuers altogether. In comparison, consumers rarely change bank accounts. On top of this, bank accounts do not expire every so often, unlike credit cards. 

 

Lower Payment Processing Costs

Accepting ACH payments has a much lower cost than accepting credit cards. Most ACH payments will cost a business less than $1 for transactions under $2,500.00. When adding in all of the costs of accepting a credit card such as Interchange, Dues & Assessments, and the credit card processor margin, accepting an ACH transaction will typically will be about 1/10th the cost. 

 

Easy Integration

The ACH payment platform integrates directly into the gateway for accepting credit cards and sending invoices when merchants use the Pineapple platform. There is no need to log into separate accounts to charge customers. If the business chooses to use a hosted payment page, it also will allow customers to toggle between paying by credit card, debit card, or ACH all within the same website.

 

Should My Business Accept ACH Payments?

The first thing you need to do is figure out if ACH payments are a good fit for your business. If your industry deals with Customer Not Present Payments such as customers calling in to pay over the phone, making a payment via invoice, or paying on your website, then yes, ACH payments can be a good fit.

Next take a deeper dive at comparing it with your credit card processing costs.

For many businesses, their effective rate is near 2.50%. If your average transaction is $300 and you run 40 of these per month, your credit card processing fees would be $300.00.

In contrast, if these same customers paid your business via ACH at $0.30 per transaction, your processing costs would only be $12.00 for an annual savings of $3,456.00.

 

How Does My Business get Set Up for ACH Payment Processing?

You will want to ask your processor about getting set up to accept ACH payments. Some processors offer the solution, some do not. Very few processors offer an all-in-one solution for accepting both credit cards and ACH payments. CardChamp makes it very convenient for businesses by giving our customers a user-friendly platform to accept ACH payments via Virtual Terminal, through invoices, or on the merchant’s website through a secure hosted payment page. Transactional reporting can be viewed in real-time from anywhere the business has internet access.

 

If you know a business that would like to learn more about how accepting ACH payments can help their business, please have them contact CardChamp. At CardChamp, our mission is to rescue business owners from being taken advantage of by providing the best payment processing experience.

Meredith

Written by Meredith