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.
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.