Everything You Should Know About ACH Payment Services

ACH Payment Services For Your Business

There has been an everlasting increment in the ACH payments since the last few years. It shows an increase of 7.7% over 2018 with 24.7 billion payments on the ACH Network and the value of those payments was $55.8 trillion, up nearly 9% from 2018 as reported by NACHA. In 2019 as the annual growth rate attained a 12-year high which marked 2019 as the remarkable year for the ACH Payment Services.
So why should any business lag behind to take ACH Payment Services? Give a boost to your business by opting the ACH payment processing Solution. Apply today with Quadrapay and let your business accept ACH payments without any hassle. Stay connected with us to know how it could benefit your business? We will also discuss the newer version of ACH payments that helps you to accept and settle funds on the same day.

What Is An ACH Payment And Types?

ACH(Automated clearing house) is an electronic payment processing service in the US. It connects all the financial institutes and banks with an ACH network through which the payment gets processed. The ACH transaction can process both credit and debit card transactions. The ACH network is regulated by a governing entity known as NACHA(National Automated Clearing House Association).
If we talk about types of ACH payments, there are two:

  1. ACH Credit: The ACH credit is a type of ACH transaction when the customer pays the fund to the merchant. It can also be said that the customer pushed the fund into the merchant bank account or he authorizes the financial institution to send money from its account to the merchant account.
  2. ACH Debit: An ACH debit is a type of ACH transaction when the customer gives permission to the merchant to take payment from his account. It can also be said that the merchant pulls the fund from the customer account with his permission or the customer authorizes the merchant to withdraw money from his account.ACh debit is usually used for recurring payments.

Difference Between ACH Transaction And Credit/Debit Card Transaction

Though both the payment processing helps the merchant to accept payments online, however, they get processed through a different network. The credit /debit card transaction gets processed through the credit network of the issuing card and ACH transaction are processed through an ACH network. Apart from this, an ACH can process various forms of payment through its network like a check, eCheck or recurring billing payments.
The ACH transaction fees are very low than that of credit card processing solutions. But the transaction made through credit card is somewhere guaranteed funds, but the transaction made through ACH is not guaranteed because ACH transaction just requests for funds while in the credit card transaction, the customer borrowed money from the credit card issuing bank.

Why Should A Merchant Choose ACH Payment Services?

  • Seamless Integration
  • Competitive rates
  • Ideal for recurring billing.
  • End-to-end Encryption
  • No credit card expired issue
  • 24×7 Support

What are The Benefits Of ACH payment Services?

  • Easy Subscription Service/ Recurring billing: Unlike a traditional check, ACH has the capabilities to split the bill into an instalment or as a subscription plan for your gym or video streaming sites.
  • Virtual Terminal Processing or MOTO Business: Mail Order Telephone Order business or in simple, the business who accepts payment over the phone finds ACH is an excellent way to accept payment. A merchant can accept ACH payments through the virtual terminal.
  • Customer Convenience: ACH is very convenient to customers as this eliminates the use of the check. They don’t have to write checks all the time, and it may be even worse when a customer runs out of their cheque book.
  • Suitable for High-risk Industries: The businesses who flagged as high-risk face challenges when applying for merchant services. Most of the processors reject their application. But an ACH payment service can be the best alternative payment method to accept credit/debit card transactions online.
  • B2B Payment Processing: B2B or business to business payment transfer is not so easy until the introduction of ACH. Formally, businesses deal with checks but the introduction of ACH in 1972 and operated by Federal Reserve Bank of San Francisco. According to NACHA, 45% of the payments in B2B industries is being done by ACH
  • Invoicing And Reporting Functionality: Once the payment gets processed, an invoice is generated which automatically sent to the customer
  • Fewer Disputes: As compared to the credit/debit card transaction, ACH payments have fewer disputes.
    Security Adherence: The transactions are secured and follow PCI-DSS standards. The transactional data gets encrypted through tokenization to keep you secure.
  • Affordable Price: ACH transaction is much cheaper as compared with Credit card processing.
  • Environment Friendly: The ACH payment processing is causing the check system to disappear.

What Is Same-day ACH?

In the USA 90% of the funds are transferred through ACH. The ACH payment Services is considered as the backbone of the US payment system. Since ACH was created in 1972, the NACHA, the governing body of ACH payments continually tried to improve the payment system that is able to process the transaction fastly. The same day is the result of their effort that was introduced in 2015.
There are two additional windows to submit the same-day ACH file provided by ACH operators.

  • A morning submission time limits at 10:30 AM ET, with settlement occurring at 1:00 PM.
  • An afternoon submission time limits at 2:45 PM ET, with settlement occurring at 5:00 PM.

Both types of ACH payments are eligible for same-day ACH. But high volume transactions above $25,000 or international transactions are not eligible for same-day ACH.
The implementation effort to acclimate the businesses and financial institution towards the faster processing environment had become effective over three phases.

  • Phase 1 had become effective on September 23, 2016;
  • Phase 2 had become effective on September 15, 2017;
  • Phase 3 had become effective on March 16, 2018

You can read more about it at NACHA’s official documentation

How Long Does It Take To Process ACH Payments?

Until some time ago, ACH payments used to take a lot of time to settle. The settlement time can vary between 3-7 days or even more. But nothing like that today. The gap in settlement time has decreased a lot in the last few years. With the NACHA’s continued effort to acclimate the businesses and financial institution towards the faster processing system has reduced the gap into a one-day settlement. Yes! You heard it right. With the introduction of same-day ACH, the funds will be available to you on the same day, either it is ACH credit or ACH debit.

If you are also a merchant looking for ACH Payment Processing solution, then apply today with Quadrapay. No matter what your business is, today, most of the businesses are accepting payments via ACH, which is fast, affordable and secure.

Get in touch with us at [email protected]
Happy Processing!!!

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