How To Set Up ACH Payments For Your Business By BNG Payments
How to Set Up Automatic Clearing House (ACH) Payments for Your Business
Small business owners may profit from ACH in a variety of ways. This form of payment has become a popular payables automation option for transferring corporate cash swiftly and cost effectively, but it also works well for receivables. It's commonly utilized for consumer payments, enabling for more consistent billing payments and a more stable business basis.
This article discusses why you should include ACH as a payment option to your list of options. It also includes a simple, step-by-step tutorial for using ACH in your business.
How To Set Up ACH Payments Step By Step
Before we go over how to set up ACH payments for your business, let's go over how ACH works so you have a better understanding of how it works.
What is an ACH (Automated Clearing House) Payment?
The Automated Clearing House (ACH) is a network of participating banks in the United States that facilitates cash transfers from one bank to another. It lets you and your customers to make one-time and/or continuous automated payments to and from your bank account, making payment straightforward and convenient for both of you.
What Are ACH Transactions and How Do They Work?
A bank that makes the request (known as the Originating Depository Financial Institution, or ODFI) and a bank that receives the request are involved in every ACH transaction (the Receiving Depository Financial Institution, or RDFI).
Let's assume you want a consumer to pay you on a monthly basis. By sending a transaction request to ACH or the Federal Reserve, your bank functions as the ODFI, and the request is processed in the form of a credit to your account. Your request is subsequently sent to the RDFI, where the customer's bank verifies that funds are available and completes the procedure.
The advantages of accepting ACH payments
ACH payments provide a lot of advantages. Let's go through the advantages in depth so you can get the most of ACH.
Transaction Fees are Reduced
Most forms of transactions, including credit card transactions, debit card transactions, wire transfers, and even paper checks, have higher processing fees than ACH transactions. If you routinely conduct a significant number of continuing transactions, you may pick a fixed transaction cost each month in addition to lower per-transaction rates for even greater savings.
Increased Transaction Size Limits to Allow for Quick Payment
The maximum transaction size permitted via ACH for quick payment is greater than that permitted by cheques or credit cards. With ACH, you may typically accept payments up to $25,000 per day.
ACH vs. Wire Transfers: What's the Difference?
An ACH payment is a type of electronic money transfer that works similarly to a wire transfer (EFT). ACH is different from wire transfers in that it allows you to send and receive money, whereas wire transfers only allow you to send money.
The ACH payment processing time for a client transaction is longer (on average 3-5 days), but it is less expensive and can be done without the help of bank staff.
ACH has a number of advantages over a credit card or debit card transaction.
In addition to being less expensive than using a credit card, using an ACH payment method results in less disputes than using a credit card. ACH charges can only be challenged if they were not allowed, were not made on the right date, or were for a different amount than what was agreed upon.
A debit card and a credit card are comparable in that they both use the same network. This gives ACH a significant edge.
Cash vs. ACH
You can properly manage cash flow with ACH while decreasing the risk of cash loss or theft. You may also use ACH to get a merchant cash advance.
Advantages of Electronic Checks Over Paper Checks
ACH costs are less expensive than paper checks, because they eliminate the possibility of theft or loss. ACH is a more secure way to pay your payments. Checks can still be handled over ACH as part of the eCheck payment procedure.
The Steps to Integrating ACH Payments into Your business
Now that you've learned about the advantages of ACH payments, you're ready to get started. The current ACH payment setup procedure is quite straightforward. Follow these seven steps to get started:
Step 1: Decide if ACH is a good fit for you.
ACH can only be used between banks in the United States. If you don't offer recurring billing or have a high frequency of transactions, adding this extra payment method may not be beneficial if you already have other payment alternatives.
Step 2: Select an Automated Clearing House (ACH) Payment Processor
Your business bank may have ACH capabilities, allowing you to send an ACH through them. However, third-party suppliers may be able to help you evaluate the costs of services for one-time and automatic payments. There are several choices; BNG Payments, for example, is a third-party supplier. Select three or four suppliers before making your final decision for the greatest outcomes.
Step 3: Go over the ACH Terms and Conditions with a fine-toothed comb.
Make careful to read each payment provider's ACH payment terms and conditions before making your final decision. There's usually a catch to a bargain that appears too good to be true.
Step 4: Complete the Bank Paperwork for the Payment Processor.
To transmit bank account funds, ACH syncs directly with consumer and business bank accounts. This will require information from your business bank account, such as the routing number and account number. You'll also need to estimate the number of transactions and sign the paperwork.
Step 5: Decide which ACH payment types you want to use.
When it comes to registering, there are four primary payment kinds that are determined by how clients provide rights. Choose the methods of access that are most convenient for you.
PDD ACH: The payer's written consent to debit payments automatically.
WEB ACH: Web-based authorization to debit money automatically.
TEL ACH: Permission to automatically deduct payments by phone. Please keep in mind that these calls must be recorded.
A written check that grants approval, such as an ARC or a BOC.
Step 6: Integrate ACH with your accounting software
Most accounting software, such as QuickBooks, can communicate directly with ACH. This enables quick and easy payment while simultaneously producing invoices and providing continuing invoices and receipts to clients for each automated payment. You won't have to do anything.
Step 7: Consult a Payment Professional—Your Merchant Service Provider
It's possible that your present credit card processor won't be able to handle ACH transactions. It's a good idea to choose a single merchant service provider (MSP) that accepts ACH and all other types of customer payments.
BNG Payments is a one-stop shop for all of your software and hardware needs, including virtual terminals for increased mobility. Because of our extensive expertise with ACH setup, we can easily link ACH to your existing accounting software. We even have a simple yet thorough onboarding procedure to make getting started with ACH as simple as possible.
Payment processing has never been easier than with BNG Payments. We make it simple to take ACH payments, credit and debit cards, mobile payments, e-commerce, and more, no matter what your processing needs are.
To learn more about what BNG Payments can accomplish for your business, please contact us.
BNG Payments
3285 47th St S, Fargo, ND 58104
+18887775659