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ACH, short for Automated Clearing House, is an electronic payment solution which enables merchants to deduct funds directly from customer bank accounts. ACH transactions save time and money because, unlike credit card transactions, there are no interchange fees involved. Additionally, the customer and merchant do not exchange any documents or check numbers.
ACH payment processing works like this:
The inner workings of an ACH transfer may appear complicated, but it is simply the process of debiting money from the customer bank account into a merchant account. Same-day ACH processing will streamline this process even more.
ACH payment processing provides a secure, private electronic payment transfer system that connects nearly all the financial institutions of the U.S. As e-commerce grows, so does ACH payment processing: More and more e-commerce businesses are becoming dependent on the ACH processing, allowing it to evolve further. Other benefits include:
Virtual Check allows merchants to enter their customer’s bank account information into a checkout page, virtual terminal, Web API or a batch upload to collect funds. Once transactions are submitted, they will be verified to make sure the consumer bank accounts are valid. If the check does not get declined through the authentication process, the checks are turned into a remotely created check (RCC) and then printed out into a demand draft. The processor will then take the demand draft(s) to the merchant’s bank account for deposit.
ICL provides a viable check solution that operates outside of NACHA guidelines but with the same time frame to capture debits. Merchants to create a virtual check – an Image Cash Letter – using a customer’s bank account information. This virtual check can be verified, at the request of the merchant, against Instabill’s check verification system. Once verified, we provide the depository bank with the appropriate transaction information.
Check 21 is the method of creating a scanned version of a paper check to submit as payment. Once the check is scanned, it follows the path of a physical check: The image processed at the Federal Banking System, and once approved, the customer’s checking account is debited. The funds are then transferred to the merchant’s account.
Click on each section to expand and learn more about ACH payment processing today.
ACH processing is used among — but certainly not limited to — industry types such as:
The reason these merchants use ACH processing is to set up recurring payments from customers. In the case of non-profits, ACH enables for recurring donations.
The number of ACH payments grew to 22 billion worldwide in 2013 — $38.7 trillion in payments — marking a 4 percent increase from 2012. Customers and businesses feel more comfortable with it than using other means.
In addition to providing integrated ACH bank transfer solutions with our merchant account services, Instabill offers risk management, PCI-compliant payment gateways, live customer support and a large menu payment processing options with other services. From international to offshore to high risk merchant accounts, Instabill has cost-effective solutions for your e-commerce business.