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What are the benefits of low cost ACH payments?

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Last editedMay 20222 min read

ACH payments, also known as eChecks, offer a novel and beneficial alternative for businesses accepting customer payments. They’re safe, cost-effective and highly convenient. In this post, we’ll define what an ACH payment is and run through some of the key advantages it offers over other payment methods.

What are ACH payments?

ACH stands for Automated Clearing House. It’s an electronic network over which individuals can transfer funds between bank accounts.

Most people are familiar with ACH payments in the form of paycheck deposits. Lots of employers choose to use ACH payments to pay their personnel via a direct transfer. However, e-checks aren’t exclusive to employers and employees, businesses can use them to make and receive payments in a variety of ways.

Benefits of ACH payments

There are a myriad of benefits to be had from using ACH payments as a business. Some of these are outlined below:

1.  Lower costs

Credit and debit card payments incur a number of fees, including processing and interchange fees. Needless to say, these can add up to a significant sum. ACH payments, meanwhile, come with a flat fee which ranges from $0.20 to $1.50 per transaction, making them a far cheaper payment method for merchants.

2. Security

Paper cheques are still rampant with fraud, according to the AFP Payments Fraud and Control Survey (login required). As there are no intermediaries involved with ACH payments, the risk of fraud is virtually eliminated.

This is a major benefit for customers. However, putting your clientele at ease vis-a-vis their safety, can also yield advantage from a business perspective. Namely, it can lead to higher customer retention and satisfaction rates.

3. Convenience

ACH payments are far more convenient than a number of other payment methods. They don’t require customers to carry around chequebooks, for example, or send cheques through the mail. Instead, they just have to follow a simple online process to make a one-time payment or set up recurring billing.

Plus, on the business end, you won’t have to make the trip to the bank or deal with piles of paper invoices and cheques. As well as time and energy, this can save you money on things like postage, ink and transport. 

4. Less room for error

As ACH payments are automated and don’t involve physical paperwork, there is naturally much less room for human error.

5. Faster processing time

While paper cheques often have to go through the post, ACH payments are completely digital. This cuts down on time that money is spent “in transit”, so to speak.

ACH payments are also often given priority over paper cheques, meaning they often get processed faster. This helps ensure you get paid far quicker than with a traditional paper check.

ACH with GoCardless

GoCardless provides an ACH Debit solution, enabling businesses to collect payments directly from their customers' bank accounts. It is easy to set up and is cost effective compared to a number of other payment methods, including card payments. Plus, it can be used for both recurring payments and one-off payments.

Another perk is that GoCardless provides high converting payment pages during the checkout experience. These are available in a variety of formats to fit your payment flow including hosted pages, drop-in modules, and custom options.

With GoCardless’s ACH Debit solution, late payments are virtually eliminated, saving your business time and money, improving cash-flow and leading to far fewer awkward conversations with customers.   

Additional features include the provision of advance knowledge about incoming payments, and visibility on who has/hasn't paid on the dashboard.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Article sources

https://www.afponline.org/docs/default-source/protected-files/mbr/2021_paymentsfraudsurveyreport-3.pdf

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