What are the benefits of ACH payment processing?

ACH payment processing offers a number of benefits to merchants and customers. For merchants, ACH payments are a cost-effective way to accept payments. They also provide a way to accept payments from customers who don’t have credit cards. For customers, ACH payments are a convenient way to pay for goods and services. They also provide a way to pay for goods and services without having to use a credit card.

How does ACH payment processing work?

ACH payment processing works by moving money from one account to another. The process begins when a customer initiates an ACH payment. The customer’s bank sends the payment to the ACH network, which then sends the payment to the merchant’s bank. The merchant’s bank then deposits the funds into the merchant’s account.

What is ACH payment software?

ACH payment software is software that helps merchants accept ACH payments. ACH payment software can help merchants accept ACH payments online, in-store, or over the phone. ACH payment software can also help merchants manage ACH payments.

ACH Payment Processing: Make payments easy.

Often called direct pay or electronic checks, Automated Clearing House (ACH) transactions are used in all kinds of situations — from employers direct depositing wages to consumers electronically paying utilities.

A fast and reliable alternative to paper checks and credit card payments, ACH payment processing allows your customers to set it and forget it — no more worrying about sending funds on time. The convenient payment method also streamlines and automates your accounting, resulting in savings that can be significant.

What is ACH Payment Processing?

During ACH payment processing, electronic ACH payments go through the Automated Clearing House Network. Money is moved from one institution account to another with the help of a centralized system that directs ACH funds to their final destination. These electronic payments provide benefits to both merchants and customers.

Why everyone likes ACH Payments

Low Cost

ACH payment processing is the most cost-effective method for the electronic transfer of funds. Automation increases cash flow and can lead to big savings — especially when collecting recurring payments.

Faster Payments

ACH eliminates paper invoices, paper checks, delays due to bounced checks and time-consuming trips to the bank.

Reduced Retention

Checking accounts don’t have credit and debit cards that expire, so merchants see less chum and fewer declines by leveraging ACH payment processing.

Fewer Interruptions

With recurring billing, busy customers don’t have to constantly keep an eye out for incoming bills or take action when payments are due — everything runs on autopilot.

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How ACH Payment Processing Works

How it works
Customer is billed

How it works
Customer initiates payment by providing authorization and necessary financial institution information to the merchant

How it works
ODFI (Originating Depository Financial Institution) debits the customer’s account and sends the ACH file to the Federal Reserve System

RDFI
The Federal Reserve routes the ACH file to the receiving bank or depository financial institution (RDFI)

RDFI Process Payment
RDFI processes payment

How it works
Payment clears and the merchant has access to the funds

ACH System vs. Credit Card

Unlike credit card payments, ACH payment processing is a U.S.-payments network only and applies solely to banking. ACH payments cannot be processed from debit or credit cards.

There are two main categories:

Direct Deposits

Includes all deposit payments — payroll, employee expense reimbursement, interest payments, utility bills, government benefits, taxes and other refunds.

Direct Payments