There are many reasons why a business should consider adding ACH capability to their portfolio of  payment processing instruments and in this article I intend to highlight the top 10 reasons.

Before I begin, I will provide a brief introduction to the ACH system…

The ACH (Automated Clearing House) network provides electronic clearing of payments for participating depository financial institutions. Transactions are initiated during the day by merchants and at the end of each business day, transactions that have accumulated are sent electronically in batches to the The Federal Reserve. The FED sorts and routes transactions to their appropriate destination and debits or credits bank accounts accordingly.

The ACH network utilizes customer bank account and routing information to initiate transactions. This data is obtained from customers by merchants. Merchants have the ability to use several different methods to obtain customer payment information.

The Top 10 Reasons to Consider ACH for your Business in 2011

  1. ACH provides businesses with payment flexibility for customers.
  2. ACH payments are environmentally friendly, they lower carbon emissions and reduce paper expenditure.
  3. Money is received faster and on time (decreases check float time). No more waiting on checks in the mail.
  4. Allows customers the ability to pay for products or services online, especially if they do not have credit cards.
  5. Receiving payment via ACH reduces costs. ACH transactions typically cost only a fraction of what it costs to accept the same transaction by swiping or manually inputting the customer’s credit card.
  6. You can convert paper checks into ACH transactions right at your place of business – No more trips to the bank!
  7. Eliminates NSF fees your bank charges your account when a customer’s check bounces. It also gives you improved ability to collect on NSF (non-sufficient funds) items
  8. THE BEST option for recurring payments
  9. Customer does not have to be present to give their payment information. You can initiate payments based on phone authorizations, authorizations received by fax or email, or authorizations received by internet
  10. There are no hardware requirements to obtain ACH capability, only a computer and an internet connection are required. All software is free, internet based, easy to use, and has feature rich reporting tools.

Here are some current ACH statistics

  • 90% of the US population has a bank account (175 million people)
  • Over 19.1 Billion ACH transactions are processed annually
  • 37.2 trillion dollars are processed through the ACH network annually
  • Electronic payments have been increasing at a rate of 9.3% annually