ACH Transfer: Embracing Technology Driven Payment Processing

Your company can use ACH or Automated Clearing House transactions for many purposes including paycheck direct deposit, local customer payments, and recurring bill pay. An Automated Clearing House is a network used by providers to process credit or debit transactions. All payments are stored in a batch file used for end of day processing. A transfer may be used to perform a direct deposit, check conversion, accept bill compensation, for ecommerce, or to move money between companies. Federal Reserve Banks serve as the largest ACH transfer operator. They process approximately sixty percent of these transactions. In 1978 transfers consisted mostly of business to business transactions. Today they are used for a wide variety of payments by both businesses and consumers.

Consumers can pay their bills online, purchase products, and pay by electronic check at business locations. The ACH network connects many financial institutions which participate in moving funds from one bank account to another electronically. The account is verified to ensure the money is available and then sent to your merchant account. These transactions remove the additional work which typically accompanies paper checks as well as allow your business to receive the funds faster. It can also greatly reduce the work behind processing employee payroll for each pay period. Upfront verifications also decrease the overall number of transactions returned each month.

E-Check: A Low Risk Business Solution

You have two basic options for transferring money to another person – electronic check or wire transfer. They differ by both price and fund availability. An e-check is created when a paper check is converted electronically. The written check may be swiped through a machine or entered into an online terminal. At the end of the day, all payments are processed in one batch as a transaction. Funds become available within one to three days. This form of electronic payment is easier and less expensive. You may use it to receive recurring transactions, online payments, or for various other purposes. Wire transfers occur instantaneously but also are more expensive. As a business, it makes more sense to pursue ACH processing because you will be handling these transactions quite frequently. An experienced provider can set up your business for this processing method at a minimal cost.

Providing an e-check option to your customers makes it easy to draft their checking account with or without the paper check. Fees are involved as with any other type of payment acceptance method. You will be charged a per transaction fee which normally ranges below fifty cents. If the minimum number of transactions is not met, a flat fee will be involved. A gateway makes it possible to communicate with financial institutions handling the batch file. A flat fee will also be charged for this portion of the service. The type of account, services utilized, and items needed to set up this payment method will determine additional upfront costs. AVPS is here to help your business offer the most convenient payment options to customers. You can view our services online or contact one of our professionals today to determine which merchant processing methods offer the most convenience to your business and its customers.

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