ACH Payment Processing Services – Accept ACH Payments Instantly

What is ACH Payment Processing

The ACH is an electronic network for financial transactions in the U.S. that enables you to electronically collect payments from your customers. Single-entry and recurring payments can be levied by directly debiting your customer’s checking or saving accounts. The most common uses of ACH are payroll direct deposit, online bill payment, and mortgage and loan repayment.

Premium Payments is the best ACH payment processing company that has helped various businesses to streamline their payment process through reliable ACH payment processing Services. We have assembled an A-team of seasoned professionals. Our experts know everything there is to know about ACH payment. The ability of these professionals to understand problems businesses face and come up with sustainable solutions to address business pain points sets them apart.

Why Using ACH Payment Services Makes Sense

ACH payment processing for small businesses can benefit your business in more ways than you could imagine. Thanks to technological advancements, same-day ACH initiatives are underway and have almost eliminated the problem of built-in payment settlement delay.

• Low Transaction Cost
  One of the major benefits of ACH is a low processing fee. Because ACH payment transactions are processed in batches, they cost less than credit card transactions and checks. On average, a traditional credit card transaction will cost you 2 – 6 percent. On the other hand, an ACH payment transaction costs just around 1$ on average.
• Security
  ACH transactions are more secure than transactions conducted through paper checks. ACH payments are processed through an encrypted system and in a secure environment designed to safeguard customers’ credentials.
• Convenience
  ACH payments settle faster, which can help boost customers’ loyalty and retention. You are in the driver’s seat and can provide your customers the flexibility to make a one-time payment or set up recurring payments.

Types of ACH Transactions

• Direct ACH deposit– Businesses can ‘push’ money into their other accounts, or someone else’s account (can be an individual or business)
• Direct ACH payment- Involves ‘pulling’ money from an individual’s or business’s account. These transactions can be initiated, when a customer sets up recurring payments with their service providers

How ACH Payments Work

• Initiation- An originator (can be a bank, individual, or business) initiates an ACH transaction(ACH deposit/payment).
• Entry submission– The Originating Depository Financial Institution or ODFI (the entity responsible for processing the originator’s payment) submits the entry.
• The ODFI sends ACH entries in batches– The ODFI sends entries in batches to an operator for processing.
• Sorting- The operator sorts through batches to determine whether they are payments or deposits.
• Entry submission- Once sorted, the entries are sent to their respective Receiving Depository Financial Institution or RDFI (an institution qualified to receive ACH entries).
• The receiving bank confirms the availability of funds: In case of a deposit, the receiving bank must confirm whether there are sufficient funds in the ODFI.
• The final step– The RDFI debits or credits the entity’s account.

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Frequently Asked Questions About ACH Payment Processing Services

How Does ACH Payment Processing Work?

ACH payments (also known as ‘direct payments’) are electronic transfers from one account to another that are processed through the Automated Clearing House (ACH) network. An ACH debit occurs when a customer authorizes the merchant to make a transaction. On the other hand, when money gets deposited into a receiver’s account, it is called an ACH credit.

What Does ACH Payment Stand For?

Automated Clearing House’ or ACH is basically a central clearing system. The ACH network of financial institutions (banks and credit unions) facilitates transactions in the United States and is managed by National Automated Clearing House Association (NACHA).

ACH payments are digital payments that move funds directly from one bank account to another, even if the two account holders don’t share the same bank. You will need to connect your bank account to make or receive ACH payments. This can be done electronically to be connected immediately.

What Is an Example of an ACH Payment?

Common examples of ACH transactions are:

• A customer paying a service provider.
• Employers deposit money into their employees’ checking accounts.
• Consumer moving funds from one bank account to another.

How Long Do ACH Payments Take?

Delivery of ACH transfers can take several business days, meaning days that banks are open, typically no weekends or holidays. In addition, unlike the real-time processing of wire transfers, ACH transfers are processed by a network operator in batches only seven times a day.

Once the transaction has been issued, ACH payments are generally available to vendors within three to five business days.

How To Receive ACH Payments?

ACH payments can be considered “E-Checks” since they serve the same function as an electronic check.

• Once you set up an ACH merchant account, it lets you use the ACH network to withdraw payments directly from customers’ bank accounts.
• Request authorization from your customers because ACH billing requires authorization.
• 12Set up the payment details and submit the payment information.

Can ACH Payments Be Returned?

An ACH payment could be returned for several reasons. This might happen when there are insufficient funds in the checking account being debited. Or, it might also occur if an account is no longer active. When an ACH payment is returned, the Receiving Depository Financial Institution (RDFI) will get the return code.

Can a Bank Reverse an ACH Payment?

Account-holders and merchants who encounter issues with ACH payments can stop or reverse them, unlike wire transfers which are usually irreversible. National Automated Clearing House Association (NACHA) rules cover if and when a simple reversal is allowed. Your bank can only reverse a payment from your account for any one of the following reasons:

• If the wrong amount was transferred (for example, $200 instead of $150).
• If a transfer had the wrong account number, the sender or recipient was not the right account holder.
• If a transfer is made more than once, the duplicates would be reversed.

How To Accept ACH Payments on Your Website?

Here are the steps for accepting ACH payments:

Set up an ACH merchant account. A merchant account lets you use the ACH network to withdraw payments directly from customers’ bank accounts. To open a merchant account, you will need to provide the following information:

• Federal tax ID.
• The number of years you have been in business.
• Your estimated processing volume.

(Note that it can take a few days to be approved.)

Request authorization from your customers since ACH billing requires it. Just as a customer must authorize you to cash a paper check by signing it, they must also authorize you to make an ACH (eCheck) withdrawal. They can do this by signing a contract or order form, submitting an online payment form, or agreeing to it in a recorded phone conversation.

Once this is done, the customer can submit an online payment form with their checking account, routing number, and the payment amount whether it’s a one-time or a recurring payment. Alternately, they can give you that information via a recorded phone conversation.

What Is the Difference Between ACH and Direct Deposit?

The broad difference between ACH debits and Direct Deposits is that the former has funds being pulled out of an account, while the latter has funds being pushed into an account. ACH transfers cover a more comprehensive range of transactions that Direct Deposits do not. ACH transfers work best with small, frequent deposits. Direct Deposit is an electronic payment method that uses the ACH network to move money between banks.