How Fast Does An ACH Transaction Go Through?
The transaction flow in an ACH environment provided by a third party ACH payment processor is simple. Most of the ACH payment processor allows the merchants to integrate the ACH payment gateway on the sales website. With the gateway, they can easily process echecks online.
The Customer initiates the transaction by filling the billing information that includes the billing address, name, email, phone number, account number, routing number, type of account and amount. After filling the form the customer clicks the submit button.
This information is securely transferred to the gateway provided by the ACH payment processor. The system automatically checks the account number and routing number. After validating these two elements the system also verify the status of the account in terms of availability of funds to clear the specific transaction. This process confirms that the transaction is coming from a live account and the account has got sufficient balance to clear the transaction.
Some ACH payment processors also perform a voice verification on each transaction. They call the customer to identify whether it is a genuine transaction or not. Once the processor gets the confirmation that the transaction is genuine and is approved by the customer then the transaction is sent to the bank for processing in batch. This batch processing happens once or twice a day.
The moment the transaction reaches the ACH system that specific amount is placed on hold. This means that the amount will still appear in the payer’s account but will be not available for withdrawal.
Once the ACH system completes the internal check and approval process then the funds are transferred to the account of the ACH payment processor. Based on the terms of service the ACH payment processor transfers the funds to the merchants business bank account after deducting the transaction rates and charges.
Merchants can also use the virtual terminal or Moto panel that is offered by the payment service provider. With this virtual terminal, merchants can collect the billing information along with the account information and submit the same into the VT. The additional steps are the same as mentioned above.
Merchants from high risk industries can certainly take massive advantage of the system. Primarily because most of the payment service providers and acquiring banks do not prefer to offer Credit Card payment solution to the merchant from high risk industries. Merchants that already on the match list or are considered as a terminated merchant can also take advantage of ACH or Echeck.