ACH payments are becoming more common, and more people are starting to hear about them. If you’ve never heard of ACH payments, however, then you need to know how they work before you consider them. In their most simple form, ACH payments are an alternative to checks that can be used to offer your clients a more convenient solution. They also operate on a whole other network.
Let’s take a look at what ACH payments are exactly and if you should consider them for your organization.
What are ACH Payments?
ACH payments stand for automatic clearing house payments, and you can get an idea of what they are just by looking at the name. ACH payments are transacted over an independent network of banking and financial institutions. Payments are processed in batches by the institutions over the network, which allows them to be cleared much faster.
While payments by checks may require time to be sent, processed, verified, and cleared, the whole process can be done in seconds over the ACH network. This network is run by a very reputable independent agency, and payments are entirely secured.
Like we said earlier, ACH payments are processed much more quickly over the network since many of the steps are eliminated, including the need to verify every single check that is being sent. But there are many other benefits.
One of the greatest benefits of these is that they eliminate payment delays and guesswork. If a payment is due on a certain day, you don’t have to wait a few days to know if the payment has gone through or was actually issued by the client. The payment only goes through once the account has been verified to belong to the client and they have the funds needed.
Another benefit of ACH payments is that they are much cheaper. While a business could spend hundreds of dollars on credit card processing fees, they could drive these costs down to pennies with an ACH system.
If you’re in a field where you ask for recurring payments and checks are common, then using ACH is a no-brainer. Not only will you be able to manage your cash flow better, but you will also avoid fraud, bounced checks, and most of the inconveniences that come with payment issues. But ACH works for anyone who accepts payments through check as it is safer for both parties. This makes it perfect for people who are in industries like consulting, law, SaaS, managed services, and contractors.
If you’re in any of these fields, Yodlee ACH payments could work for you. Yodlee ACH payments allow you to set up automated payments fast and safely and get your funds within 24 hours in most cases. It is also one of the most reliable and affordable services of its kind.