High Risk

High-Risk ACH Processing

High Risk ACH
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Josh Phelps
April 14, 2023


High-risk ACH processing is the most viable option for certain industries that cannot use standard merchant accounts. The main reason ACH is so beneficial is because it does not have to follow the rulebook the major card brands like Visa and Mastercard impose. As a result, high-risk merchants can sell the products they want and accept payments from customers directly without worrying about getting dropped or penalized.

Not only that, but 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 for your customers.

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ACH For High Risk Businesses

Automated Clearing House (ACH) transactions are gaining popularity as a reliable and efficient way to transfer funds electronically, especially for high-risk businesses. The reason is that ACH is considered more of a stand-alone option that some businesses use for every transaction. Better yet, it enables businesses to receive payments from customers and make payments to vendors and suppliers conveniently and at a lower cost.

For high-risk industries, navigating the ACH payment landscape can be trickier due to the increased risk of chargebacks and fraud that is associated with certain verticals. Nonetheless, companies like Zen Payments provide clear paths forward to getting ACH solutions.

In this article, we delve into the world of ACH payment processing specifically for high-risk industries and shed light on how it can help mitigate risks, lower fees, and boost efficiency.

What is High-Risk ACH Processing?

ACH stands for Automated Clearing House. This is the main system companies use to transfer funds electronically from financial entities. Automated Clearing House 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. Essentially, ACH processing allows a bank to transfer funds directly from a customer's bank account into yours.

Now what does “high-risk” mean exactly? This status is the bank's perspective on certain business types. For them, it means safeguarding against potential risks. These measures may include enhanced fraud detection tools, identity verification, and thorough underwriting to assess the risk associated with each transaction.

Combined, high-risk ACH processing providers work closely with businesses in high-risk industries to understand their unique needs that standard banks don't board. If you're a high-risk merchant, finding a high-risk ACH processing will be key.

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.

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 in 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, you should open a high-risk merchant account. The good news is 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, which is key when working with high-risk merchants. For example, charities that choose to accept donations by setting up booths, subscription merchants, and leasing companies are three types of businesses that can benefit from ACH processing and a high-risk ACH account. If you are looking to accept ACH payments, find a merchant account provider you trust to get a high-risk merchant account set up for you.

How to Set up High-Risk ACH Processing

One of the biggest reasons many high-risk and 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.

Benefits Of High-Risk ACH Processing

  1. Expanded Payment Options
    Adopting ACH as a payment alternative allows businesses in high-risk industries to offer their customers a wider range of options at checkout. They provide flexibility not only on the solutions side but also for customers who want to pay more directly and avoid credit card transactions. Moreover, it can help businesses attract and retain customers and is an excellent tool for subscription billing or continuity billing payment models.
  2. Reduced Chargebacks and Fraud
    High-risk payment providers typically employ advanced fraud detection tools and verification processes to minimize the risk of chargebacks and fraud. This can help a business in a high-risk industry protect themselves from potential financial losses associated with chargebacks and fraudulent transactions, which can negatively impact their revenue and reputation. High-risk ACH payment processors also protect against fraud because they do everything online and route payments through your payment gateway. This reduces the risk your company will experience fraud as it removes the need for paper checks. When you accept an ACH payment, you know it has passed multiple security measures.
  3. 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. Credit card processing fees are notoriously high. High-risk merchant accounts and ACH processing is a way to get around that. ACH debit transactions typically cost about $.29 each, a much lower fee than credit card companies charge.
  4. Easy Arrangements For Recurring Payment Plans
    Automated Clearing House 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. High-risk ACH 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.
  5. 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.
  6. 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.

ACH vs Credit Card Payments

Automated Clearing House online transactions differ from credit card payments because they cut out the middleman. As they are direct-to-bank transactions, the merchant which 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 information to 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.

Best ACH High-Risk Merchant Account

The best ACH merchant accounts provide an excellent way for high-risk merchants to reduce processing fees and get approved fast. 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.

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 working with high-risk merchants in the ACH 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 high-risk ACH processing service you should trust. Contact us today to get set up 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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