While cash is known as king, credit and debit cards have followed carefully behind as other well-known ways of payment. With the preferred utilization of traditional credit and debit cards, exactly why is it that new entrepreneurs are looking for ways to make payments ? It’s because traditional credit and debit cards possess a big drawback-high digesting costs with every single transaction.
That’s where an Automated Clearing House (ACH) transfer might help. Below we list a few of the primary reasons ACH can be a far more convenient and superior payment choice for business:
Cutting Time Cost
The common time for a check payment to clear is five to six business days, whereas an ACH settlement could be completed in half that point. Better still, NACHA (National Automated Clearing House) has approved an operating guideline that may allow same-day time ACH transfers possible. Saving period with ACH payments can improve workflow effectiveness, payment flexibility, not to mention, quicker usage of funds.
Mitigating Possibility of Frauds
Checks are susceptible to signature forgery and also basic misplacement. ACH mitigates these issues-transfers are immediate, removing intermediaries and reducing extra possibilities for fraud. ACH’s payment processors perform two-way micro-verification of every parties’ authenticity. This guarantees the username and passwords provided is usually accurate and that we now have no blocks on the accounts, which prevents bounced checks and incomplete obligations.
Extremely User-Friendly to Both Payer and Receiver
ACH payment processing benefit both the payer and the business in each transaction. For the payers, they no longer have to carry around checkbooks, plus they can have the versatility of one-time payments or recurring payments. For businesses, ACH transfers (which take place between two bank accounts) save them the trouble of payment failures due to a payer’s card expiring.
Effective Tool for Recurring Payments
While all businesses can benefit from ACH, those following a subscription model can use the added advantage of recurring billing. Recurring billing reduces monthly processing, which in turn considerably reduces associated transactional fees, saving your business money.
Lowering Transaction Fees
Of course, increased convenience and security are great perks, but one of the biggest reasons businesses switch to ACH is its lower transaction fees. On average, both checks and credit cards carry higher costs than ACH processing due to their associated administrative procedures, including authorization, payment initiation, printing, signing, mailing, and time. Because ACH simply transfers funds between two banks through a clearing house, the transactions costs are much lower and much more appealing.
Now that you know why business are switching to ACH transfers, it’s time for your business to benefit as well. Stop cutting checks and switch to ACH payment processing-it’s not only a smarter way to cope with financial transactions, but also user-friendly and simple to implement for all business types.