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ACH Payment Processing

Learn more about ACH Payment Processing with Zen Payments
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Josh Phelps
October 25, 2022


ACH payment processing is faster and more secure than standard credit card processing. As a result, payments made by ACH are often charged lower fees. As a merchant, it's useful to find ways to incorporate ACH transactions as an option to your customers.

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What Is ACH Payment Processing?

ACH stands for Automated Clearing House. This is the main system companies use to transfer funds electronically from financial entities. ACH has its own regulations which outline the liabilities of parties involved with the transaction. When the term ACH is used to describe a type of payment, it refers to a direct transfer of funds that are usually made through online channels, rather than traditional credit card payment processing.

How Does ACH Payment Processing Work?

When an ACH payment is made, the money is transferred between bank accounts. It goes directly from one bank account to another without any type of 'middleman' such as a check or credit card. In practice, ACH payments are essentially the same as bank transfers. The funds typically appear the new bank account within a few days. ACH payment processing is a great way to move funds without involving different credit card processors or networks.

ACH Merchant Account For Payment Processing Solutions

If you want to process payments using only ACH transfers, there are a number of ACH merchant accounts you can choose from. Many payment processing companies have this option as a high-risk solution because it's considered a more secure payment. For example, charities who choose to accept donations by setting up booths, subscription merchants, and leasing companies are three types of businesses that can benefit from ACH processing. If you are looking to accept ACH payments, find a merchant account provider you trust to get everything set up for you.

How to Set up ACH Payment Processing

One of the biggest reasons many small businesses set up ACH payment processing systems is because it makes recurring payments simple. If you need to accept payments from customers on a regular basis, ACH payment processing solutions could be the answer.

The process is very user-friendly because you only need your customer's bank account information, including the routing number and account number. Once you have that information, you'll be able to accept payments from that account directly at a specific interval. ACH payment processing is also a great option because unlike credit cards, bank account information doesn't expire. This means you will never receive a notification that online payments can't be processed until a new credit card is provided.

Best High-Risk ACH Merchant Account

The best ACH merchant accounts provide an excellent way for businesses to reduce processing fees and get approved fast with a payment processing resource. Moreover, they guarantee that you get paid for the products and services you provide by offering more security and lower chances of chargebacks.

Your ACH merchant account connects directly to your payment gateway. A secure payment gateway is key for credit card processing because it keeps the payment information secure and protected throughout the transactions. If you want to accept ACH payments, you'll want to ensure you get the most out of your payment processing by offering this reliable secure solution for direct transfers.

ACH vs Credit Card Payments

ACH transactions online are different from credit card payments because they cut out the middleman. Because they are direct-to-bank transactions, the merchant that is part of the ACH network does not have to contact the customer's credit card company. Instead, the money is simply transferred to the business bank account from the customer's account. Unlimited recurring billing can be set up once you know the account details, so the customer's information is only inputted once. Ultimately, because the ACH payment system is essentially a transfer between financial institutions, it is much simpler to receive ACH payments than credit card transactions.

ACH vs Direct Debit

These terms are often used interchangeably and refer to the same method of payment. ACH is a colloquial way of describing the system that makes the transaction happen. On the other hand, direct debit is the type of transaction itself. Both direct debit and ACH transactions involve sharing banking informationto send wire transfers immediately.

Most commonly direct debit is used for payroll, any new employee at a company who wants their paycheck to automatically be sent to their bank account will sign up for this type of service. Additionally, businesses that don't want to pay transaction fees such as suppliers and manufacturers will ask to receive wire transfers of this type.

Industries That Use ACH Payments

The best industries for ACH payments are ones that require reliable consistent payments or large transactions. For example, international companies who manufacture machine parts want to see money in their account before shipping products out. This is where direct wire transfers through an ACH merchant account prove very useful. They can quickly receive the ACH payment from the customer's checking account before shipping.

MOTO Payments

MOTO is an acronym that stands for Mail Order or Telephone Order. If you've ever watched the Home Shopping Network or a televised charity marathon, you've seen them taking MOTO payments. These payments can be uniquely tricky because there is little security measured involved with validating identity.

Mail order payments are sent via standard mail with customer payment information included. They are riskier because many parties can intercept the mail and there is a physical record of your payment information. Similarly, a person on the other end of the phone my write down your credit card numbers when they take a telephone payment.

Benefits of ACH Transactions

There are many reasons why setting up an ACH merchant account could be beneficial to your business.

1. Lower Processing Fees

If you're trying to decide between ACH or credit card payment processors, it's important to take their transaction fees into account. ACH debit transactions typically cost about $.29 each, a much lower fee than credit card companies charge.

2. Easy Recurring Payment Arrangements

ACH Payment Processing is ideal for recurring billing in many industries. The virtual payment portal makes it easy to set up recurring payments online between bank accounts. It's especially useful for monthly billing and recurring online payments. ACH payment processing companies will set up the ACH merchant account so that the bill-paying process is simple, secure, and paperless. Automatic ACH payments between bank accounts also remove the chance of human error during the billing process.

3. Fast Payment Delivery

Unlike checks, which can take a long time to process, ACH payments are often completed within the same day or a few days at most. A traditional check can be frustrating for both the merchant and the customer because it takes time for the money to appear in the merchant account and be withdrawn from the customer account. The additional time and steps it takes to go from the customer to the merchant also adds additional risk for mistakes. Credit card transactions can also take longer to process.

Choosing to work with an ACH payment processor will make the process smoother, faster, and less frustrating for both the merchant and customer.

4. Reduced Fraud For Your Business

ACH payment processors do everything online and route payments through your payment gateway. This reduces the risk your company will experience fraud because it removes the need for paper checks. When you accept an ACH payment, you know it has passed multiple security measures.

5. A Safer Option For Your Customers

ACH payment solutions are also safer than traditional checks because they reduce the risk of identity theft. Unlike checks, a customer only needs to give out their bank information once to set up recurring electronic payments. Checks also include the customer's name and address, putting them at increased risk for identity theft.

Why Make Zen Payments Your ACH Merchant Services Provider?

If you're looking for ACH payment processing solutions, Zen Payments is the best ACH payment processing company in the business. We have multiple ACH merchant account options and can find the solution that works best for your company. We also have over 15 years of experience in the high-risk payment processing and merchant account industry, so you can trust that we know how to work with businesses like yours.

If you're looking for low fees and excellent customer service, Zen Payments is the ACH payment processing service you should trust. Contact us today to get setup and start accepting ach payments!

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Josh Phelps is an experienced sales professional with eight years of expertise, including four years in payment processing. Throughout his career, Josh has successfully secured approvals for thousands of businesses, demonstrating his skill in navigating and optimizing the payment processing landscape.


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