ACH Processing is Growing and the Possibilities are Endless

ACH Processing is Growing and the Possibilities are Endless

We love a good success story.

The Automated Clearinghouse recently released its ach processing combined statistics for Q1 and Q2 of 2018, and the growth is continuing:

  • 83.5 million same day ACH transactions in the first six months of 2018 — 25.2 million more than Q1 and Q2 of 2017.
  • ACH payments totaled $40.9 million in Q2 of 2018 alone, up from $11.9 million in Q2 of 2017.
  • The Automated Clearinghouse has reported gains of 5 percent or higher in 12 of the 14 quarters since the first phase of the transition to same day ACH in 2015.

We’ve long been fans of ACH and check payment solutions, which can benefit any e-commerce business.

5 attractive features of ACH payment processing?

Not only is ACH processing growing, but what lies between the aforementioned undisputed figures is the fact that consumers and businesses value ACH. Recently, we blogged about the ‘Pay with Gas Buddy’ initiative, which connects consumer’s checking accounts with a Gas Buddy card that enables rewards and incentives.

We think other businesses will follow Gas Buddy’s lead. With ACH payment processing, businesses have a degree of creativity with which they can work, one of its many benefits.

  • ACH payments are safe: As credit and debit card information remains an increasingly attractive target for criminals, ACH payments have very low fraud rates.
  • Less (if any) hassle: ACH payments eliminate the need for paper checks (as well as stamps and envelopes for that matter). A one-time recurring setup is an attractive feature to offer a consumer.
  • Perfect for recurring and financial-related industries: Ideally, we see many financial-related industries take advantage of the benefits of ACH payments, such as many different lenders (online and payday, particularly). Many merchants who offer subscriptions and products ideal for recurring payments are also big on the use of ACH.
  • ACH solves common problems with high risk industries: We’ll say it — every industry can use ACH payments and check payment solutions, especially if an industry is classified as high risk. When a merchant can’t get a merchant account, or encounters other difficulties such as higher than expected volume or excessive chargeback rates, ACH processing acts as a parachute of sorts. As we like to say here at Instabill, ACH and check payment solutions keep high risk merchants in business.
  • A haven for chargeback-laden industries: With the major card brands’ diminishing tolerance for chargebacks, ACH processing is a viable option to offer merchants as a way to alleviate chargebacks and keep them at a minimum. Where card issuers used to be more ‘relaxed’ with merchants’ chargeback rates (when an acceptable level was 2 percent of sales or 200 chargebacks per month), they have been cracking down, halving their tolerance levels and instituting intervention measures to merchants who hover close to the 1 percent/100-per-month limit.

Where does ACH processing go from here?

In the NACHA press release regarding the results of ACH processing growth, there was one line that caught our eye, a quote from Jane Larimer, COO of NACHA:

“More people than ever before are enjoying the benefits of Same Day ACH. As the adoption of Same Day ACH continues to grow, NACHA will seek to continue to expand the capabilities of Same Day ACH and the ACH Network.”

We take this to mean that NACHA is considering raising the amount of same day ACH payments, which is currently capped at $25,000. ACH’s consistent growth lends well to the rumors stating its $25,000 cap will be raised to $100,000.

It makes sense: 98 percent of ACH transactions in Q1 and Q2 this year have been at or just below the $25,000 cap. An increase to $100,000, would appeal to more merchants and industries.

We’re always open to discussing how the benefits of ACH processing and check solutions can help any business — e-commerce or storefront. Speak with an ACH merchant account manager one-on-one at 1-800-530-2444.

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