Read To Know Why ACH and eCheck Payments Are Labelled As The Better Forms of Payments!

Isn’t it true that there are a few times when you might have got confused between ACH and eCheck payments? Of course, it stands true. This presented article will give you an insight into the world of electronic check payments and even inform you how feasible their costs of transactions can be. Apart from it, you will also be presented with an idea about how fast, flexible, and cost-effective ACH and eCheck payment transactions can be for businesses. So, read how ACH differs from eCheck payments and learn how easily you can set up payment transactions.

What is an ACH payment?

ACH stands for Automated Clearing House network, which facilitates the transfer of money between bank accounts across the United States. This network is also governed by the organization called NACHA (National Automated Clearing House Association).

An ACH payment is an electronic payment that gets facilitated from one bank to another through the ACH network. Their processed type of transaction is called electronic funds transfer (EFT).

ACH payment permits merchants to allow their customers to transfer money directly from their bank accounts. ACH transactions include direct deposits, wire transfers, electronic benefit payments, and ACH disbursements.

This is why ACH payments get processed through different merchant accounts and payment processing providers, these payments may have chargebacks and dispute resolution policies also.

What is an eCheck?

An ecHeck also works like the digital version of the paper check. It is dependent upon the ACH network to facilitate funds from one bank account to another. This is why ‘eCheck’ and ‘ACH payment’ can be used interchangeably with each other.

Set Up An Merchant Account:
Usually, it is observed that the merchant account allows one to use the ACH network to withdraw payments directly from their customer account. So, to open the merchant account, you must provide details information including federal tax ID, the number of years of your business formation, and the exact estimated processing volume.

Request Authorization From Customers:
ACH billing generally requires authorization. For example, a customer must authorize the person to cash a proper check by signing it. This is why merchants allow merchants to make an ACH (eCheck) withdrawal. You will be delighted to know that the merchant can easily work upon this by signing either the order form or submitting an online payment form.

Set Up The Payment Details:
On another side, the customer can easily submit an online payment form with their checking account and rounding number; it may include the payment amount, even if it is a one-time, recurring payment.

Submit The Payment Information:
Then, you need to click on the ‘save’ or ‘submit’ option in your payment processing software and it shall process the ACH transaction.

Are you familiar with the benefits of ACH and eCheck Payments?

We at Paycron fully understand that there are several reasons stating why many businesses prefer to accept ACH and eCheck payments.

1. Cost-effective:
eCheck services consist of micro fees, which are usually not carried out by credit cards. These eCheck services can be processed quickly as compared to other physical checks.

2. Fast & Convenient:
eCheck processing is faster than paper check processing. It is defined as the process of depositing funds into the payer’s account within 3-5 days.

Although credit card payments generally take 2-3 business days to process payments, banks are commonly known for delaying credit card funds for days and weeks. Credit card companies usually execute this due to non-payment issues. Thus, it is the foremost reason eCheck services carry greater significance.

3. Appropriate For Recurring Payments:
eChecks get labeled as the most popular way to make recurring payments. They enable merchants to create reliable revenue. In case, if the customer has authorized the billing schedule, the person can use eCheck services to capture the invoice.

4. Provide An Extra Layer of Protection:
There are several times when a customer disputes a credit card charge, they can claim that the product or service they received shall not be what they had expected. But there are three acceptable reasons for disputing an ACH charge-

• When it didn’t get authorization from the account holder.
• When it gets processed earlier than authorized.
• When it gets processed for a different amount of money than the amount of authorized money.

So, if a merchant wants to dispute the transaction, the customer must cite one of three reasons for claiming his claim to the bank.

ACH & eCheck Payments Can Overcome Credit Card Processing:

ACH & eCheck payments can easily overcome credit card processing services. This is because ACH payments help to protect revenue from recurring billing, which is labeled to be a far better option than credit cards. This is why most of the time merchants generally find it difficult to change their bank accounts, which works like a big hassle. Many Americans prefer to earn wages that can be directly deposited into their bank accounts. Perhaps, this is the reason why many household bills get directly debited from the bank accounts.

This is because of the inconvenience linked with charging banks, ACH payments usually become stable over time. As per the reports revealed by National ACH Processing.com, it is revealed that more than 20% of debit and credit cards get reissued annually. Many debit and credit cards usually get expired, lost, or stolen. Some of them are reissued due to data security breaches. It usually takes time and dedicated effort to update the card data. Despite the best efforts, an individual may not be able to obtain updated card data from customers. Thus, it may result in a loss in recurring billing revenue for many customers.

Conclusion:

Apart from that, payment processing companies usually find it easier to process payments than card payments. This is why merchants have a better chance to deposit a check whenever they want. Unlimited recurring billing plans also get counted in every ACH merchant account. This is why recurring payments are uninterrupted until the customer cancels or the payment gets terminated. Lastly, it can be concluded that ACH payments help merchants protect their cash flow and even increase the lifetime value of their business. Apart from it, these payments ensure a seamless continuation of services or delivery of products to customers.