How To Accept ACH Payments Online
Online Payment Acceptance of ACH Payments
Your Guide to ACH Online Bill Payment
ACH provides business owners with powerful advantages over traditional payment methods. One of these benefits is the cost. You’ll save more per transaction than with a debit card, credit card or wire transfer transaction and put more money in your pocket.
Online ACH payments are the most popular way to make them. But how do you do that? This article will show you how to accept ACH payments online, so that you can enjoy the benefits of ACH as soon as possible.
Accept ACH Payment Processing Online
These are the steps you need to take ACH payments online.
Step #1: Determine If ACH Payments Work for Your Type of Business
ACH has many benefits but is not available to merchants based outside the USA. The network is not available to international merchants, even Canada.
Step #2: Open An ACH Merchant Account
An ACH merchant account allows you to send and receive ACH electronic payments. You can withdraw money from your customer’s account either as a one-time payment, or at a frequency that you and your customer decide. Your bank, an independent sales organization or member service provider, can set up your merchant accounts.
You may already have a provider to handle your debit and credit card payments. However, it is worth weighing the costs of each provider. A bank might not charge an account fee for ACH in some cases, especially when it comes to smaller transactions.
Be sure to check the cost of recurring bills when you are getting pricing from a service provider. Some providers charge extra for this service. You should also ensure that you choose a merchant service company that is certified by Payment Card Industry Data Security Standard, (PCI DSS), and provides fraud and chargeback prevention.
You can receive and forward payments from any provider, no matter which one you choose. This applies to all B2B transactions and payroll to employees. Direct-deposit payroll can be considered a type of ACH.
After choosing your provider, you’ll need to enter information like your federal tax ID, the length of your business, and the estimated amount of transactions. Approval takes just a few days after all the information has been submitted.
Step #3: Step 3: Request Authorization of Funds
After your account has been set up, the customer will need to complete an application form that includes bank details and connects you to their bank. You can send an application form for funds transfer in a printed form. The customer can fill it in over the phone or in writing. Or you can provide an online payment option. BNG Payments has templates for authorization forms.
Customers can easily authorize online. Online business can attract customers to ACH when the iron is hot. This increases the likelihood of ACH signups. Online payments have become the most popular choice because of these benefits.
Step #4: Set Up Payment Details
What information is required to receive an ACH payment?
With the authorization form complete, the customer will need to provide their checking account and routing number and may be required to provide additional information to verify their identities, such as an email or phone number.
Step #5: Choose an ACH Payment Method
The customer will need to indicate the amount of the payment and whether it is a one time ACH payment or recurring. If the payment is recurring, the customer must approve the frequency of payments, such as monthly payments. To increase participation, offer flexible payment options.
Step #6: Submit the Form
Once the information and permission are completed, click “Save” or “Submit.”
Common Questions Customers Ask about ACH Payments
These are some questions that often arise in ACH Payment Processing.
What is the ACH Network?
ACH stands to Automated Clearing House. It is an electronic network that connects banks and allows for real-time money transfers from one bank to another. This network is only available in the United States and offers a supplementary payment option, direct payments with low-cost transactions and regular automatic payments. Every electronic funds transfer (EFT), works in the same way as a check, cash or wire transfer. However, unlike credit card payments which use a third party processor, EFTs are not processed by credit card networks.
How Long Does ACH Take to Clear?
ACH Credit transactions (funds sent to the customer) must be processed within one business day, or one or two days. An ACH debit transaction (funds taken from the customer by your bank) must be processed within the next business day. Noting that funds may be held by your receiving bank for verification, transactions should be initiated and completed within bank hours. The average time it takes to complete a transaction is 3-5 days. Bank hours are required for same-day transfers.
What are the Benefits of ACH Payment Processing?
Transaction fees are low
How much do ACH transfers cost? Is ACH processing free?
The main benefit of ACH is its price. These transactions are free to customers and much cheaper than wire transfers, credit card transactions and debit card transactions. It’s cheaper than writing a check if your bank charges you for check deposits. Your bank might not charge you for this service. A portion of ACH processing fees is included in the monthly bank fee. Mobile deposits are also covered, but there are limits. There is usually a charge for high-volume merchants in the US that have strong cash flows. ACH is still cheaper than wire transfers and credit cards.
Some ACH payment processors have a flat transaction fee of $0.25 to $0.75. Some processors charge a flat percentage rate of 0.5 % to 1%. An additional monthly fee may be charged by a provider. All of this pricing is still far less than a credit card transaction, which can be between 1.5% to 3% and a processing fee that ranges from $0.10 up to $0.30.
ACH works directly with your accounting software
ACH accounting software allows customers to be notified about upcoming payments and can process payments automatically. This eliminates the need for customers to manually generate invoices or receipts via email, paper, or postal mail. Billing errors can be a major accounting problem. ACH software automates the process. ACH is a great way to save time and allow you to focus on your business growth, especially if you have a lot of orders.
BNG Payments, a payment processing provider, can help you set up your software so that it works with ACH.
Regular and Reliable Billing Schedule
You can rely on regular billing cycles to provide steady, reliable income that will allow you to run your business smoothly. Customers and you still have the option to customize billing for size or frequency. However, billing customers via ACH allows you to know when you are paid. This creates a solid business foundation.
Larger Payment Capability
ACH will accept larger amounts up to $25,000. You won’t have to limit your credit card eligibility or wait for approvals on high-dollar amounts.
ACH instant funds verification lets you know that sufficient funds are available to process payments. While the customer has access to your products and services, checks can bounce. It is also possible to avoid fraud transactions as checks can be stolen or forged. These are the reasons ACH has been a stronger alternative to traditional paper checks.
What are the drawbacks to ACH payment processing?
Are there any penalties for ACH payments?
Most often, rejected payments are due to customer issues, such as insufficient money, closed bank accounts, account location problems, or bank restrictions that prevent you from withdrawing funds from the account. You can still be charged fees for a rejected payment, even if the customer caused most of the problems. To avoid paying higher transfer fees for future billing cycles, you must correct any issues immediately. However, trust customers can be protected by offering ACH payments. To avoid any ongoing chargeback fees and non-sufficient funds (NSF) fees, make sure you regularly review your account.
However, customers aren’t the only problem. Merchants with high-risk customers are subject to a higher rate of charge and may also be subject to a termination fee if they continue to have problems.
How do I accept ACH payments in QuickBooks Online?
Since QuickBooks is a popular accounting software, here’s how you do it online:
- While in QuickBooks, click the gear menu and click Company Settings located inside the Settings category.
- To set up a customer, click Payments and then Learn More.
- Choose a payment plan and input the necessary data (i.e., bank account information)
- Click the “+” at the top of the invoice and click Invoice to provide payment options.
- Enter all required information and select the online payment option you offer.
- Enter the credit card information of the customer.
Incorporate ACH Payments into Your Business
A merchant service provider can help you connect your terminals and websites to the ACH network quickly and easily. BNG Payments is familiar with this process and can help you to have an easy-to-use, reliable system that integrates with your accounting software. You can set up customers using ACH from any device including your website. Invoices and payments are generated automatically and receipts sent out.
We have seen firsthand the power of ACH payments in maximizing profits and building a stronger business foundation. We will ensure that it works as intended and keep you compliant with ACH regulations. Contact us to learn more.
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