subject: Understanding Ach Check Payment Processing [print this page] As technology and the Internet continue to advance, payment processing has become more flexible and convenient for businesses and consumers alike. E-commerce capabilities, direct deposit payments and electronic business-to-business transactions help to streamline the payment process, saving time and money while improving overall business. ACH check payment processing is widely used among government, commercial and business sectors. Read on to learn more about ACH, including types of ACH payments and the benefits of ACH.
What Is ACH?:
ACH stands for Automated Clearing House, which refers to a federally regulated electronic network of U.S. financial transactions. Governed by the National Automated Clearing House Association (NACHA) and operated by the Federal Reserve and Electronic Payments Network, the system allows banks to send money back and forth electronically, processing large volumes of payments in batches. To make an ACH payment, account holders authorize the ACH, and the account is then identified by the bank's routing number and account number.
Types of ACH Check Payment Processing:
Direct deposit is a common form of ACH check payment processing that allows employers to electronically deposit paychecks directly into employees' bank accounts. This reduces the amount of paper checks issued and allows employees to deposit funds without making a trip to the bank.
Consumers can make ACH payments to pay mortgage bills, loans, utility bills, insurance premiums and more. ACH payments also offer a secure and efficient way for e-commerce businesses to accept payments without the need for credit or debit cards. Other types of ACH payments include federal, state, and local tax payments and business-to-business payments.
Benefits of ACH:
By electronically automating various types of payments, business can save a great deal of time and money regarding the payment process. ACH is low cost, allowing companies to reduce costs associated with check processing, paper mailing and lost payments. ACH is also a greener alternative to traditional paper check processing, as emissions and resources are greatly reduced.
With the ability to make payments directly from their bank accounts, consumers can enjoy security and convenience. Merchants and businesses save time and money, improving customer service and overall business operations while increasing profits.
Getting Started:
Accepting ACH payments for your business is a simple process. Simply sign up for a merchant credit card account, and ask your credit card processing provider about ACH payments. With ACH, you can expand your customer base while improving cash flow, reducing costs and contributing to a greener business solution.
by: Julie Henaghan
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