Using ACH transfers to send and receive money offers several key benefits for businesses.
Electronic payments, like an ACH transfer, are faster and easier to handle compared to the traditional method of paying by check. Unlike checks, ACH transfers:
- Are not held up by the time it takes for a check to be mailed
- Cannot be lost
- Do not have to be manually entered
Many businesses accept payment by credit card, but the processing fees tend to be high - often in the realm of 2-4% per transaction (and that doesn’t include setup and operational fees).
It costs a lot less to take payment by ACH transfer, and those savings add up significantly when you’re taking recurring payments from customers. We explore more on ACH fees in Chapter 2.
ACH payments make the payment process easier for potential customers compared to writing a check, increasing chances of converting them to a sale.
And, in the case of recurring purchases, payments via ACH can be automatic - meaning the customer doesn’t need to worry about receiving and paying a bill, removing that element of friction in their relationship with your business.
Although credit cards also offer customers the ability to pay online or over the phone, ACH provides a helpful alternative for those customers who prefer not to give out their credit card information, or do not have one.
For consumers (payers)
In addition to being beneficial for businesses, ACH payments also offer benefits for consumers.
Paying via ACH removes any burden on the customer to order and write checks, mail them out, and cross their fingers and wait for delivery. And, by paying the funds directly from their bank account, they don’t risk racking up stressful credit card debt.
For recurring purchases, paying via ACH allows consumers to have the funds debited from their bank account automatically each time the payment is due. This removes any hassle involved in keeping an eye out for bills to arrive, and following the payment instructions contained within.‹ View table of contents Next page ›