ACH payments are fast, secure, and an extremely common way for businesses to send or receive money. ACH payments are typically processed within two business days at most, which means when you get paid by ACH, there is a possibility you can collect your funds within a few hours of receiving payment confirmation from your payee (or their bank). So what are the benefits of getting paid by ACH and what are the best ways to drive these types of payments?
What are ACH payments?
ACH payments are electronic payments, typically credited to a recipient’s bank account. They’re used for recurring bills and are very common in business-to-business transactions, but they can also be used for consumer-to-business (C2B) transactions as well.
ACH payments are generally faster than other payment methods because they don’t require a credit check or any other form of verification from the sender. The sender simply sends an authorization code to his/her bank along with instructions on how much money should be transferred from his/her account to the recipients, which will then be processed automatically by your financial institution at the completion of each request.
4 benefits of ACH payments
ACH payments are a great option for businesses that want to offer their customers the ability to pay on their terms and receive funds quickly. They’re also secure and much less expensive than some other payment methods, including payments via credit card and checks.
- ACH payments are extremely secure and are a direct connection from bank to bank.
- ACH payments are often cheaper than other payment methods, typically charging a set rate rather than a percentage of the transaction.
- ACH payments can be used for recurring bills or subscriptions, which makes them great for companies that want to offer their customers the ability to pay on a constant cycle.
ACH payments are processed by your bank or the financial institution (like PayPal) using an automated clearing house (ACH) system that allows them to send funds directly into your account without any additional fees or delays. This means you’ll get paid faster than if you utilize a direct deposit or wire transfer, which can take several days after they’ve been deposited into their own accounts.
The main benefit of this process is that it’s a more consistent method of accepting payments because there isn’t any risk involved in waiting for pending funds until they’re available for use—funds that are received can be utilized immediately upon being credited.
How do you start getting paid by ACH?
Once you’ve determined that your bank is not going to be able to help, it’s time to start looking for a new payment processor. There are many companies that offer ACH services and will allow you to get paid by ACH instead of by check or money order.
If your bank does not offer this service, consider switching banks and opening an account at another institution that does provide this option. This can be particularly helpful if:
- You want more control over how much money comes into your business;
- You have trouble getting payments approved through traditional channels (like checks); or you want the security of knowing that funds will arrive on time without having them sitting in an account for days before being deposited into yours
The next step is to find a payment processor that provides ACH services. These companies will typically charge a monthly fee and a per-transaction fee for their services. Once you have selected a company, you can begin setting up the account by submitting your business and banking information—including the routing number and bank address—and providing other details such as how much money should be sent each time someone makes a payment to you through the ACH processor.
Ways To Drive ACH Payments
Same Bank Transfer
Using the same bank that your customers is using is an extremly simple way to transfer money. This is the easiest way to get started and allows you to work directly with the banks payment processor, which will be familiar with your business and you can explain how and why you need ACH services. The bank is essentially transferring money between internal accounts, and this is extremely low risk.
Using a Processor that Supports Recurring Payments
Using a payment processor that supports recurring payments (like ACH) as well as the other services you need is the simplest way you can expand the types of payments you can accept. If your processors supports ACH, this will allow you to accept recurring digital payments without having to worry about creating individual bank accounts for each client or account type.
Focusing on Convenience and Security
When looking to drive ACH payments from your customers, focus on highlighting conveneice and the security. Top of the line payment processors will be able to ensure that all of your ACH transactions run smoothly by assiting with automatic billing setup and offering comprehensive reportin features so that everyone, recipient and payee knows exactly what is happening at all times.
Allocate a Budget
Define a budget for your ACH promotions to encourage your customers to utilize this payment method. Start with a small budget and see how it goes. If you see results and your customers are electing to pay for your goods or serivces with ACH, increase the budget at will. You can also try different marketing channels to see which works best for you. Make sure to track the results of your marketing campaigns so you know what works and what doesn’t. If you are looking for customer adoption of this particular payment method, spending a piece of your marketing budget on awareness can help.
Define Your Strategy and Goals
In order to encourage customer adoption of a particular payment method, you have to define your “payments mix” strategy and goals. There are many different strategies that you can use to drive more ACH payments, including:
Defining your goals with the help of your sales team or marketing department. What do they want? What do they need? Is it new customers, existing customers who have been on the fence about buying from you, or both? How do you plan on reaching these people? Do they already know about your company and services but aren’t ready to make a purchase decision (e.g., someone who’s interested in becoming an agent)? If so, then what should you be doing differently with you content and advertising campaigns so that those prospects will consider investing their money in you rather than someone else’s a product or service offerings?
Promote ACH Payments During Customer Onboarding
If you’re a business that offers ACH payments, it can be hard to drive customers to your website and into the checkout process. You might want to consider sending out email or text message campaigns that promote ACH payments as an option during customer onboarding.
- Email: Promote the benefits of using ACH payments by including links in your emails and encouraging consumers who receive them to sign up for this payment method.
- Text Messages: Text messages are another great way of driving traffic and conversions by providing value-added information right when customers need it most (e.g., “We offer free shipping on orders over $50!”). The value proposition will get more attention than if it were simply presented at checkout time; plus this type of communication is becoming more common as open rates on text message marketing is extremely high —so why not use them? If possible try adding a link back into these messages so that users can easily follow through with their purchase later on down the road if they haven’t already made up their minds yet.
- Include an ACH payment option on your website and mobile app
ACH payments are a great way to make sure your business is paid on time and in full. This is also a great way to gain your customers trust and ensure that their payments are made with the highest security measures taken. If you’re looking for more information about how to implement ACH payments into your business, please reach out to us and one of our representatives can assist you in your search.