Recurring ACH Payments
Offering ACH payments, especially for recurring billing, offers a host of compelling benefits for businesses of all types.
Fewer costs, higher profits and happier customers. Offering ACH payments – especially for recurring billing – offers a host of compelling benefits for businesses of all types.
Wondering whether offering ACH payment is worth your time? The Automated Clearing House (ACH) network is ideally suited for recurring payments. Let’s take a closer look to see why.
Did you know that if you accept ACH payments it can cost significantly less than credit cards? If your business accepts credit and debit card payments, then you’re already familiar with the processing fees – often between 2-4% per transaction – that accompany these payment methods. It costs a lot less to take payment by ACH transfer, and those savings add up significantly when you’re taking recurring payments from customers.
With so many opportunities for fraud or error, it’s likely that customers may not be comfortable paying by paper check. Fortunately, ACH payments are much more secure than paper checks. For one, ACH payments can’t be lost in the mail, and they cut out all intermediaries and reduce the risk of fraud and tampering. ACH payments eliminate the security risks of paper checks, increasing the chance that your customers will feel safe and do business with your company.
Without recurring billing, customers must upload credit card information, write a check, or click a button every time they want to make a payment. Each of these “touch points” exposes users to potential hacking and phishing. But with recurring billing, all transactions happen behind the scenes, making it harder for hackers to get their hands on sensitive financial data. ACH payments are already quite secure, but recurring billing makes them even more so.
Convenience & Greater Customer Satisfaction
Customer satisfaction is a critical component of sustainable business growth. Anything you can do to make your customers’ lives easier will ultimately make your business more profitable in the long run.
ACH payments are convenient for both you and your customers. ACH provides a helpful alternative for those customers who prefer not to give out their credit card information, or do not have one. Your customers won’t have to carry their checkbooks around or send checks in the mail.
With recurring payments, the customer doesn’t need to worry about receiving and paying a bill, removing that element of friction in their relationship with your business. Paying via ACH removes any hassle involved in keeping an eye out for bills to arrive and following the payment instructions contained within.
As a result, bills are paid on time and merchants don’t have to impose their customers with late payments. It’s a win-win.
Speed and ease
More than ever, businesses avoid paper materials due to the inefficiencies. Physical transactions waste time and money, create the possibility for confusion, and are an unnecessary use of resources. Now, according to a 2019 Federal Reserving Payments Study, 80% of businesses are seeking ways to convert paper checks into digital payments. ACH transfers are faster and easier to handle compared to the traditional method of paying by check. Unlike checks, ACH transfers:
- Are not held up by the time it takes for a check to be mailed
- Cannot be lost
- Do not have to be manually entered
Fewer failed payments: Since ACH transactions originate from a bank account instead of a credit card, the chance of failed payments is lower. Your customers’ bank account and routing number will likely remain the same for years. With ACH, customers don’t generally have to worry about credit limits or expired, canceled, blocked or incorrect account numbers.
The Not-So-Good of ACH Transactions
If you’re concerned about settlement delays and the potential of “bounced” payments, ACH might not be the best approach for you. The biggest drawback of ACH is that all transactions are processed in batches. Incoming requests accumulate in the network until a certain threshold is reached, at which all pending transfers are processed at once. This makes ACH payments unsuitable for time-sensitive transactions. Also, because of batch processing delays, you might not learn of the declined sale until after you’ve released your product or service to that customer.
How Do I Get ACH Payment Processing?
You can access ACH Payment Processing and all of its benefits through a payment processor like Payway. Payment processors facilitate the actual payment and deposit the money directly into your business account. With Payway, ACH is processed with the same PCI standards as credit cards.
Set up ACH through our virtual terminal to automate processing and prepare and upload account data according to banks’ specifications.