What’s the easiest way to move money between banks, without the use of checks, cash, or credit cards? Three simple letters: ACH. And ACH is quickly becoming the most loved payment types by businesses across the United States.
What is ACH processing?
ACH (Automated Clearing House) is a network that coordinates electronic payments and automated money transfers.
Chances are, you may be using ACH without even realizing it. If you get paid via direct deposit, that’s a form of ACH transfer. Paying bills online directly from your bank account, either one-off or recurring is another form of ACH transfer.
ACH gives businesses the option to pay bills electronically. Instead of a check, which can take a few weeks to be deposited in the bank, ACH transfers with Bambora take roughly four business days to complete.
Check out the video below for an overview of ACH payments:
Why use ACH?
While there are many reasons to use ACH, businesses are leaning towards this payment method for:
- Lower Processing Fees: ACH costs less than any other payment type.
- Inclusivity: Allows your customers to accept funds from those without a credit card.
- Recurring & Stand-alone payments: Perfect for regular payment intervals or one-off transactions.
How does an ACH payment work?
The ACH network is a batch processing system that banks and financial institutions use to aggregate millions of payments a day, and get them ready for processing.
There are two types of ACH payments; debits (direct payment) and credits (direct deposit).
Debits: Commonly used for subscription or recurring billing, ACH debits can be used to pay bills or invoices online through a bank account.
Credits: The opposite of a debit. With ACH credits, money is deposited into a bank account, for example a refund or payroll.
An ACH debit “pulls” money from one bank account, and the ACH credit “pushes” it into another account. This push-and-pull system makes sending payments quick and painless.
Is a holistic payment offering the solution you’ve been looking for? Incorporating ACH into your software can do just that. Visit our Billing & Transfers page to learn more about the benefits of ACH.