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Electronic payments have been the preferred way of receiving payments for many businesses for a long time. The ACH is a network used by banks and other financial institutions to process electronic payments. It provides both businesses and customers with a convenient way of sending and receiving payments respectively. ACH payments are also safe as they are protected by the federal government, allowing individuals and businesses to track payments through the ACH network. This article will show small businesses how they can prepare to start receiving payments through the ACH network.
All businesses with a business checking account can receive ACH payments, but the process is likely to be slow and expensive. A solution that works well is using your credit card processing company to help you accept these payments.
If you do not accept credit cards, there are third-party solutions. The best ones to consider are those that allow the use of point-of-sale systems to make things easier for you. Do your research to find providers who have reasonable fees, who allow faster payments, and provide a platform that is easy to use.
Once you choose a payment processing company, you need to register and complete the setup process. This will often involve opening a separate account or forwarding them your account details. If you decide to use a credit card payment processing company, get in touch with them directly to get set up.
The next step is collecting your payment details. These are similar to the account and routing numbers you get with a bank account. If you are using a third-party solution, these will be the details for your merchant account.
Familiarize yourself with initiating transactions through an ACH processor so you can debit your customers’ accounts. All of this will be done through the payment processor.
An ACH processor is the payment processing software that businesses use to send and receive funds through the ACH network. Businesses can use an ACH processor on their smartphone, tablet, or computer, so they always have a payment gateway available for their customers.
The ACH processor also makes it possible to receive payments from either savings or checking accounts, with the system only requiring a customer’s account number and their bank’s routing number.
Businesses can save a lot of time and money using this system, especially if they handle numerous recurring payments. You can learn more about what an ACH processor is and the underlying network it uses on the linked guide provided by Yodlee. Yodlee is a data analytics and data aggregation platform that also creates fintech solutions for banks, managers, merchants, and others. Their solutions are used in various areas including open banking, financial wellness, wealth management, and retail banking.
If your customers are worried about security, they can enter their payment details themselves. The processor will then work in the background to ensure they have the required funds and then pull them from their account.Accepting ACH payments is a secure and cost-effective option for businesses that handle lots of transactions. The good news is that setting up everything to make things work as expected is relatively easy, so you start receiving payments as soon as possible.