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ACH Processing: Inform Yourself
By dilson | November 14, 2007
Electronic checks offer businesses and consumers convenient flexible ACH processing for processing. The correct positioning of electronic check processing reduces operating expenses, improves cash flow and streamlines business operations.
ACH processing offers electronic funds transfer (EFT) services for businesses, whose market includes non face-to-face transactions. The wide choice of electronic check and ACH solutions means that businesses, including those who are considered on-demand, can benefit from ACH payment processing services.
Automated Clearing House (ACH) is an electronic network for financial transactions in the United States. ACH processes large volumes of both credit and debit transactions which are originated in batches. Businesses use ACH to collect from customer’s online, rather than accepting credit or debit cards.
Improve cash flow with quicker access to your money
Save your customers time and money
Increase on-time collections Receive 48-hour notification of NSF
Eliminate manual reconciliation of insufficient funds Eliminate time-wasting trips to the bank
1. ACH processing offers worry-free about counterfeit checks or forged signatures.
2. ACH processing fees largely depend on what kind of account you will have and how frequently you use the service. Almost all services will give you some kind of discount for bulk usage. ACH fee costs are per transaction not per electronic check. This means that using ACH to represent bounced checks will cost you a separate fee each time, which is yet another reason that trying to contact the customer who gave you a bounced check to get an alternate form of payment may not be such a bad idea.
Likewise, check by phone reduces banking fees. Check by phone costs inexpensive though depends on the volume of checks to be processed monthly, ideally, will almost always be less than the expenses of accepting credit cards.
ACH processing is a very easy form of payment. Many people like this paperless form of paying for things without the hassle or finance charges of a credit card.
Hence, cost of ACH processing to start up usually is not that much, though the fee per transaction could fluctuate depending on the plan and company you use and how frequently you make per transactions.
3. Electronic checks through ACH processing can turn into bounced checks as easily as paper ones can. In this case, you can re-present the check and see if it goes through with available funds a second time. There is usually another fee to do this and it can get costly, so trying to secure a different form of payment is always a good idea.
4. In ACH processing you need to go under long method starting with the initiative of the Originator to enter into Automated Clearing House (ACH) Network with the authorization of the Receiver. The Originator will create an ACH entry to be given to an Originating Depository Financial Institution (ODFI), which can be any financial institution that does ACH origination. This ACH entry is then sent to an ACH Operator and is passed on to the Receiving Depository Financial Institution (RDFI), where the Receiver’s account is issued either a credit or debit, depending on the ACH transaction.
Getting paid, paying bills, buying things and writing checks will be done in an instant with the advantage of today’s primary tool in acquiring payment and that is through accepting check by ACH Network – it is then your choice!
Topics: Automated Clearing House (ACH) |