Processing payments are just among the few challenges many small businesses face today. For instance, aside from constantly collecting payments from clients, business owners have to go to the bank to make a check deposit.
Fortunately, thriving companies are now learning the benefits of Automated Clearing House (ACH) payments and how they can make their business payment processes more manageable.
Automated Clearing House (ACH) Payments
ACH payments allow business owners to conduct digital transactions through direct transfers. These include refunds, payroll, interest payments, and government benefits. For insurance settings, they use the ACH form authorization generator from Rotessa to collect payments directly from their customer’s bank account.
That said, if you’re a small business owner, it might be the perfect time for you to implement ACH payments to enhance your payment processes. Here’s a list of how your small business can benefit from this modern payment process.
1. Improved Security
Paper check payment is more prone to be subjected to fraud and scams. It’s because when customers write a paper check and send it via mail, there are numerous ways for their checks to be compromised. For instance, it may get lost along the way or the check may not arrive at the business office.
But fortunately, ACH payments offer a more secure method. Unlike paper checks, they can’t be misplaced in the mail and the risk of being tampered with is substantially low. Additionally, payment processors can conduct two-party validation to confirm the authenticity of your customer and you as a business owner. This confirmation ensures that transactions are authorized and that the account information you entered is valid.
2. Recurring Billing
If your business works on a subscription-based model wherein you bill your customers regularly, ACH payments can just be your solution. It can help manage or even prevent instances of unpaid invoices, say when your customers forget to pay their bills.
Additionally, ACH payments also bring convenience to your customers. For instance, your customers don’t need to constantly remind themselves to pay their bills because recurring billing does the job for them. It’s also essential to note that ACH payments are one of the most cost- efficient payment methods because it helps business owners save on processing fees.
3. Convenience And Faster Processing Time
ACH payments can also help improve your customer’s experience by simplifying the payment process. ACH payments are not only more reliable than a traditional paper check, but convenient too. Instead of sending checks via mail or carrying checkbooks with them, they can simply opt for digital transactions. By making business processes easier for customers, you can encourage more clients to engage with your small business.
Moreover, since ACH payments run on a digital platform, you can easily access their payments, real-time. Unlike paper checks, wherein you’d have to make a deposit and wait for the bank to clear the transaction, before gaining access to the fund.
4. Lower Transaction Cost
As reported by the Bank of America, customers generally spend USD 4 to USD 20 on writing a check, such as on printing, authorization, mailing cost, payment initiation, timing spent, and signing. But with ACH payments, another primary benefit small business owners can get from it is the low processing fees compared to credit cards or paper checks. It’s because the processing fees of ACH payments are often less than USD 1 per transaction.
In addition, since ACH payments cut out paper checks, ink, and postage, small business owners can gain the time they need to spend on valuable business areas, allowing them to streamline systems.
5. Preferred By Customers
The Federal Reserve Payments Study reported in 2019 that paper checks usage dropped from around 40 billion in the year 2000 to below 20 billion transactions in 2018. On the other hand, the number of ACH transactions increased at a 6% annual rate from 2015 to 2018. Plus, ACH payments showed record growth in 2020, with billions of new transactions added.
For that reason, it’s apparent that many customers today prefer ACH payments over paper checks and are more likely willing to open their e-wallets due to the convenience and security that ACH ensures to them. So, with ACH payments, you have a higher chance of getting new customers in 2022.
Conclusion
With all the benefits mentioned, it’s clear that the ACH payment method is one of the safest, reliable systems within the business landscape. So, if you’re eager to increase efficiency in your business by providing an accessible, secure, and convenient payment process for your customers—and help you save money and time at the same time—now is the time to implement ACH payments in your business.
