The automated system for sending and receiving money between bank accounts is known as the ACH network. The ACH network has been in service for over 50 years.  It is widely recognized as one of the most reliable and secure payment processing systems in the world.

The ACH network is governed by operating rules of NACHA.org, which creates the regulations for ACH payments.  NACHA also provides guidance for interbank clearing of electronic payments for participating depository financial institutions.  Almost all US banks participate in the ACH network.

ACH credits are used for direct deposit of payroll, government benefits, tax refunds, and other payouts.  ACH debits are used for payment of consumer bills, business-to-business payments, electronic checks, e-commerce payments, and for wide range of applications for electronic funds transfer.

Both ACH debits and ACH credits are available to you when your ACH merchant account is approved. 

PARTICIPANTS IN THE ACH NETWORK

There are four parts of the ACH network.

1. Originator.  An originator is an individual corporation or other entity that initiates and trees into the ACH network.
2. Originating Depository Financial Institution (ODFI) that originates an ACH transaction.
3. Receiving Depository Financial Institution (RDFI) that receives ACH entries.
4. Receiver.  The receiver is an individual corporation or other entity that has authorized ACH transaction.

ACH MERCHANT ACCOUNTS:  ACH DEBITS

ACH debits give merchants the ability to deduct payments from customers’ bank accounts.  Funds are electronically credited to the merchant’s business bank account.

ACH debits are a familiar and trusted payment method for US buyers.  Millions of Americans regularly pay for household bills and other purchases through the ACH network.

Same day ACH makes it even faster to accept ACH payments.  Funds are withdrawn the same day from customers bank accounts if the transactions are submitted by the file cut-off time.  Faster withdrawals reduce the risk of returned transactions.  And allows merchants to ship faster. 

ACH DEBITS FOR ECOMMERCE AND MOTO PAYMENTS

Accepting ACH payments in addition to cards expands your customer base.  Get orders from buyers who don’t have cards, are maxed out on cards, or who simply prefer to pay you through a bank account rather than a card.  The more payment options you offer, the more sales you make.

More than 40% of ecommerce sites already offer ACH as a payment method.  Accepting ACH payments on your checkout page is the easiest and fastest way to get more sales without any additional effort on your part.

In addition to ecommerce, you can take ACH orders by phone or mail through a virtual terminal   And, you can also accept payments through written authorization from customers to debit their bank accounts.

ACH DEBITS FOR RECURRING PAYMENTS

ACH offers merchants serious benefits over cards for recurring payments.

Bank accounts rarely change.  It is a big hassle for consumers to change banks because direct deposit of wages and payments of household bills are linked to the bank account. 

Since bank accounts rarely change, there is seldom a need to update payment data. Recurring payments with ACH continue uninterrupted and cash flow from recurring billing continues seamlessly.

Compare this to cards.

Each year more than 20% of cards are reissued.  In order for recurring card payments to be approved, card data needs to be updated.  Despite your best efforts, you may not be able to obtain the updated card data.  Which can seriously impact your cash flow.

ACH MERCHANT ACCOUNTS:  ACH CREDITS

ACH credits are used to send money to bank accounts.  The most familiar use of ACH credits is direct deposit of wages.  Yet ACH credits are useful for merchants as well. 

ACH credits are great for issuing refunds to customers.  Rather than issuing a paper check, send an ACH credit. 

ACH credits are also useful to quickly send payments to vendors.  Or to pay employees via direct deposit rather than issuing a paper check. 

Other uses of ACH credits are insurance disbursements, investment payouts, affiliate payments, fast funding of loans, emergency payments, and reimbursement of expenses.

Interested in more information on how ACH can help your business?  Contact us today.  info@NationalACH.com.  Or call 866-ACH-7600.