The utilization of automated clearing house services is nothing new, but it is something that some merchants have not given the attention that it deserves. In fact, there are compelling reasons for choosing to work with a processor who offers all the advantages of this payment approach. Here are some of the benefits that make this strategy worth of consideration.
A Preferred Payment Approach
While it’s true that every banking institution determines the policies and procedures related to processing credits and debits, the odds are that automated clearing house payments will be processed before any paper checks presented for payment are honored. Both the buyer and the seller benefit from this faster processing, since it makes it easier to ensure the money gets where it needs to go sooner rather than later.
Keeping Processing Costs Lower
One of the major benefits of working with a processor with direct ACH connect has to do with keeping the costs lower. While there are exceptions, the cost of processing a paper check is likely to be more than processing an ACH payment. There is a significant difference in the cost of processing ACH transactions versus credit card payments. ACH charges are normally a fraction of the cost of the typical credit card processing fee.
This may not seem like a big deal when it comes to processing a single payment, but think of what it means in terms of processing hundreds or thousands of payments each day. The savings generated by utilizing ACH procedures adds to a tidy sum. Project that over the course of a month or an entire business year and it’s easy to see why this method is in the best interests of the merchant.
More Control Over Cash Flow
Does it really make that much difference if the bank clears a payment today or early tomorrow versus two business days? Many merchants would say it makes a lot of difference. A more efficient cash flow can make the difference between being able to pay suppliers on time or having to incur some type of late fee or charge. Along with having to pay those additional charges, consistently being late with payments does nothing to improve the relationship between the merchant and the supplier. By contrast, having the cash flow to pay on time every time improves the odds of being approved for more credit if the need arises.
The Security Factor
Not all of the benefits of working with a processor with direct ACH connect are related directly to the merchant. Clients also get something out of using this approach. That something has to do with keeping their account information secure.
Paying by check is fine, but it does mean the data is handled by multiple individuals along the way. That increases the potential for the information to be used without the permission of the account holder. By contrast, an ACH payment process minimizes the potential for the data to fall into the wrong hands and create problems that could take years to resolve.
The bottom line is that a secure ACH program is something every merchant should look at closely. Call today and learn more about how it works. The time will be well invested.