Why Using ACH Payments Saves You Headaches


The key objective of any for profit business large or small is to generate revenue. Not so long ago a business had no option but to accept payment at its premises or point of sale, this restricted growth and operations.

The advent of the internet has truly transformed the rules of business engagement. It gave birth to hyper-connectivity, which to a great extent leveled the playing field for small- and medium-sized enterprises.

This brought attention to the various ways a business can process and receive payments online. Over the years various methods have been utilized for online payment processing such as credit/debit cards, virtual wallets, virtual terminals etc. Within this post, we will focus on why ACH is a better payment processing option as compared to more traditional methods such as credit/debit cards.

What Is ACH?

ACH stands for “Automated Clearing House.” It is the payment network used for transfer and clearance of electronic checks or e-checks. E-check is a way to move money between banks without using paper checks, wire transfers, credit card networks, or cash. It is generated electronically and it can be transferred easily anywhere around the globe.

Why Your Business Should Use ACH As A Primary Payment Mechanism:

Reasonable Transaction Cost:

The cost associated with payment processing is one of the highest variable costs for any business. One of the biggest advantages of ACH is low processing fees, compared to traditional payment methods such as checks or credit cards.

Transaction costs on credit/debit cards can be between 2-3%. According to the  Wall Street Journal, on average it can cost between $4 to $20 (for a $100 transaction) to write a check once you factor in printing, payment initiation, authorization, signing, mailing cost, and time spent. With an ACH, the transaction cost between the two bank accounts is almost negligible. Depending on your payment gateways ACH transaction can cost between $0.25 -$1 for the same $100.

Quick Processing:

Immediate or delayed access to revenue funds can have a far-reaching operational impact on any business. Depending on your payment gateway you can have a same day transfer through ACH. This can greatly improve your business’s workflow efficiency and flexibility with payments as it allows you immediate access to cash.

Better Security:

ACH gets rid of some of the most common pitfalls of using traditional payment methods. For instance, credit card data can be stolen. ACH removes the need for customers to provide their confidential details to merchants. Similarly, traditional checks can be misplaced and are susceptible to signature forgery. ACH removes these risks through facilitating direct transfers and removing intermediaries.

Operational Convenience:

Constantly following up with your customers for payment or failed payments due to credit cards expiring? ACH makes the whole process hassle-free for both your business and the customer by facilitating a direct transaction between your businesses’ and customers’ bank accounts.

Preferred Funding:

While each bank has its own policy on paper checks and ACH transactions, a bank will usually prefer processing ACH payments first. For instance, suppose your customer has $1,500 in their checking account. If you process an $800 ACH payment on the same day in which someone else tries to cash an $800 paper check, the ACH is paid first.


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  1. https://www.wsj.com/articles/u-s-companies-cling-to-writing-paper-checks-1394494772?tesla=y