Check by Phone Payments Improve Cash Flow

Check by Phone Payments Improve Cash Flow

Echecks Boost Recurring Payments

Good news for companies that offer check by phone as a payment option. NACHA the governing body for ACH payments, finally updated the rules regarding telephone transactions.

Under the old rules for check by phone, only one time ACH debits could be authorized by telephone.  But, now you can accept verbal authorization from customers who wish to take advantage of recurring payments.

The change is certainly a welcome one for all companies that take payments over the phone.  Recurring payments are one of the easiest ways to improve cash flow and increase revenues.

Automated recurring payments save companies money.  Cash flows in on a timely basis without any manual intervention, increasing productivity and decreasing expenses.

Recurring Payments Stabilize Revenue Streams

Recurring payments enable businesses to electronically debit customers’ bank accounts on a regular basis.  Perfect for subscriptions and memberships, recurring payments stabilize revenue streams and create a predictable income stream for merchants. Recurring payments increase the life cycle retention of customers. 

Once set up, customers continue to pay month-after-month.  Customers rarely change bank accounts making direct debits an excellent long-term revenue generator for businesses.

Moreover, recurring payments allow merchants to set up easy-payment schedules for customers.  The convenient payment option lets customers to pay for product and services over time, rather than on a one-time basis.

Guidelines for Recurring Check by Phone Payments

 The following information needs to be provided for check by phone transactions:

  • Amount of the recurring payments, or a reference to the method of determining the amount of recurring payments
  • Timing (including the start date), number, and/or frequency of the ACH debits
  • Customer’s name
  • Routing and account number of the account to be debited for the recurring payments
  • Phone number for customer inquiries that is answered during normal business hours
  • Date of the customer’s oral authorization for recurring payment ACH debits.


Electronic checks are the most popular alternative payment method for US consumers. Check by phone payments give your customers a trusted and familiar way to pay you.

Echecks trump cards for recurring billing. Consumers rarely change bank accounts and payment information seldom needs to be changed. 

As a result, recurring payments continue to flow in uninterrupted. And your cash flow is protected.

Interested in a check by phone echeck account?

Contact today


Online Bill Pay Increase WEB ACH Payments

Internet bill payments via ACH payment processing continue to grow while paper checks declined during third quarter 2009.  According to NACHA , transactions of WEB e-checks for ACH online bill payments, totaled 562.6 million, up 7.6% from 522.9 million in 2008’s third quarter.

The accounts receivable conversion (ARC) for paper checks sent to mail then converted into electronic checks numbered 583.8 million transactions in the third quarter, 2009.  This was a decrease of 10.5% from 652.5 million for the same quarter in 2008

WEB echeck transaction volume is 96% of ARC transaction volume, up from 94% in the second quarter.  WEB echeck transactions are predicted to surpass ARC in 2010.

NACHA also reported that the  IAT code for international ACH payments had 303,802 transactions in the third quarter.  Since IAT went live on Sept. 18, there were only 9 days of transaction processing for IAT in third quarter.  NACHA projects annualized IAT volume of 8.5 million transactions.

Back-office conversion (BOC), that enables retailers to convert customers’ paper checks in their back offices or at processor facilities, had 41.3 million transactions in the third quarter, up 56.5% from 26.4 million a year earlier. Point-of-purchase (POP), had 120.2 million transactions, up 2.3% from 117.5 million in the 2008 period.

Volume on TEL, the e-check option for telephone-based ACH payments, was nearly unchanged at 86.3 million transactions in the third quarter compared with 86.2 million a year earlier.

Interested in ACH payment processing for your business?

Contact info@nationalach today

NACHA Targeted by Phishing Scam

NACHA is the rules governing organization for the ACH network. The organization has been receiving reports about a scam being perpetuated that consumers and businesses must avoid.

The scam is a classic phishing scheme. Emails are sent to both individuals and companies that appear to have been sent by NACHA. But, the emails are fraudulent since NACHA never sends out such transmissions.

The title of the email is “Rejected ACH Transaction.” The body of the email has a link to a website that looks like the NACHA site but is a fake site. When the recipient clicks on the link, a virus with malware is downloaded to the unsuspecting victim’s computer.

Once downloaded, malware can be used to silently invade the victim’s computer and steal passwords and logins into online banking sites. Malware can also be used to track key strokes and allow hackers to login to the online bank sites by taking over the computer system without the knowledge of the user.

Once malware infects a computer, special software is necessary to remove the code. Or, the entire system may need to be cleaned and reinstalled. Businesses and consumers must always be sure to have the most current versions of anti-virus software installed and keep them automatically updated. Operating systems and software applications security patches should also be updated automatically.


Fed Pushes for Same Day ACH Settlement

The US Federal Reserve Banks announced plans for financial institutions to clear and settle certain automated clearing house (ACH) transactions in one day. This will be the first material change to the settlement schedules for the Federal Reserve in 35 years.

The recent action was caused by the increasing threat of bilateral exchanges developed among the largest ACH players (e.g. Wells Fargo and Bank of America, Citigroup and Capital One with certain institutions). These exchanges, made possible because of new Check 21 legislation, cause big drops in the volume of transactions clearing and settling through the ACH network.

Direct relationships between banks for clearing and settlement create an inefficient payment system and drives up prices. As network revenue drops because fewer transactions are cleared, the cost per unit for all remaining ACH transactions increases The Federal Reserve has expressed concerns that lack of NACHA regulations and rules in bilateral exchanges reduces the ability to monitor transactions for illegal activies.

The new plan calls for ACH deposits made by 2:00 pm to be settled by the close of business that day rather than on the first business day after they are originated. The expedited clearing will make ACH more competitive with check-image exchange networks and bilateral image exchanges between banks.

Faster settlement times provide quicker funds availability and earlier returns for credit risk management. Despite the obvious benefits, some banks are worried about same-day credit eroding profits from lucrative wire business by driving down the price of wire transfers.

The plan will not require file format changes for submission of transactions. The fast ACH service maintains the existing formats for the standard entry class codes and complies with NACHA rules.

For more information, contact