The Basics of ACH Processing

Today, there are an endless number of businesses of all types and sizes that utilize ACH processing for payments. Commonly known as electronic checks, ACH payments are a major convenience for businesses and their B2B and B2C. If your business is not utilizing ACH payment processing, here is a short primer (or refresher) on what you need to know about ACH processing.

This type of electronic fund transfer is commonly used for direct deposit payments from employers, as well as monthly payments to service providers, such as utilities. ACH payments are increasingly used for online payments and point-of-purchase payments, as well as B2B (business-to-business) and P2P (person-to-person) payments.

One of the most beneficial parts of ACH processing is that it bypasses the card networks, and therefore bypasses interchange and assessment fees. This generally makes ACH less expensive than card payments.

While both debit transactions and ACH draw money from a checking account, debit transactions are often processed through the card networks, and thus are prone the same types of fees as credit cards. The cost to process ACH payments depends on your merchant account provider, or whichever entity you use to process ACH payments.

You can process ACH payments/e-checks using a merchant account provider or a separate entity — for example, a bank or a standalone ACH processor. BillingTree offers a complete electronic payment processing solution provide more efficient cash management capabilities and lower costs than traditional paper payments.

To learn how BillingTree solutions and services can help streamline your company’s billing practices and boost revenue cycles, contact us today.