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How to accept ACH payments? Guide for small businesses

Chris Hooper
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Last editedMay 20223 min read

A user-friendly payment process is one of the top ways to boost sales revenue. ACH-enabled bank transfers are fast, straightforward, and cost-effective. Is your website set up for ACH payments yet? We’ll discuss how to accept ACH payments from customers below and why these electronic payments are so convenient.

How do ACH payments work?

ACH payments are a simple form of EFT, or electronic funds transfer. When a customer wishes to make a payment for goods or services, they can transfer the funds directly from their bank account to your business bank account. The funds are delivered via the ACH (Automated Clearing House) network for a quick and easy transfer process. While this might sound similar to a debit card payment, the transaction is processed differently.

How to accept ACH payments

If you’re intrigued by the benefits outlined above and are ready to learn how to accept ACH payments from customers, here’s a step-by-step rundown:

Step 1: Create an ACH merchant account

The first order of business is to set up your own ACH merchant account. This gives your business access to the ACH network, enabling direct withdrawals from customer bank accounts. You’ll need to provide basic details including:

  • Estimated processing volumes

  • Certification of incorporation

  • Proof of company address

  • Valid ID for company owners

  • Federal tax ID

Step 2: Request customer authorization

Once you’re set up with a merchant account, the next step is to request authorization from your business customers. This can be compared to the signature on a paper check. Some examples of authorization include things like:

  • Verbal agreement over a recorded phone message

  • Signature on a written order form

  • Online payment form submission

GoCardless has simplified customer authorization by making it an online-only process. This keeps things simple and straightforward for both merchants and customers. Merchants simply need to create and send the authorization form to the customer with just a few clicks inside the merchant dashboard. Click to learn more about automating payment collection and eliminating late payments with GoCardless and ACH Debit.

Step 3: Set up the payment

Whatever the method of authorization, it should also include relevant payment details, including the bank name, account type, account number, routing number, and customer name. You’ll only need to take these once for recurring payments. Account information can be verified using tools like microdeposits, ensuring the account details are correct before taking a larger payment.

Are you wondering how to accept ACH payments on your website? Speak to your account provider about setting up a payment gateway that includes a specialty webform for ACH transactions.

Step 4: Submit your payment details

With authorization complete and payment details taken, the final step is to input them into the ACH system. You’ll do this either through a website payment gateway, processing software, or other third-party method.

The full process typically takes between three to five business days, including transaction verification and funds clearance.

What are the benefits of accepting online payments through ACH?

What are some reasons to accept ACH payments? Here are a few of the key benefits to consider:

1. They’re cost-effective.

Credit and debit card processing might be convenient, but it often comes with high flat fees per transaction. ACH payments are processed in batches, which lowers the flat rate per transfer.

2. They’re convenient.

Electronic payment processing typically takes about three days for the funds to clear to your account. Although it’s not the speediest method, it’s faster than paper check processing. And when credit card transactions go wrong, the funds can get tied up for weeks on end. This makes ACH payments more reliable and convenient.

3. They’re secure.

The ACH network is tightly regulated, connecting US financial institutions with many layers of security. There are clearly defined reasons for disputing ACH charges compared to credit card charges, which can be disputed for any reason.

4. They enable recurring payments.

If your business provides regular or subscription services, ACH payments allow your customers to set up a billing schedule for simple recurring payments.

The best ACH payment processing for small businesses

The best ACH payment processing for small businesses will depend on the company’s individual needs. Here are a few factors to help steer you in the right direction:

  • Compare fees carefully, including insufficient funds and chargebacks

  • Look for easy website integration with a payment gateway

  • Ensure the set-up process is easy both for your business and its customers

Setting up ACH Debit payments with GoCardless is quick, easy, and secure. With no contract or upfront fee required to get started, your business can start accepting ACH payments as soon as it's verified. Got a great accounting system in place? Let GoCardless fit in with your current system via one of our integrations with 200+ partners.

Get started on your journey to cheaper, easier, and stress-free payment collection with GoCardless.

We can help

GoCardless helps you automate payment collection via ACH Debit, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Get paid on time with ACH Debit via GoCardless. Take control: stop chasing late payments and save yourself time, money and stress.

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