ACH (Automated Clearing House) Payments are very common and helpful in our daily life. You could knowingly or unknowingly be part of the ACH network as part of your business. ACH is not a physical place as the name denotes. However, it is a network connecting all banking and financial institutions within the United States. Zil is a cloud-based banking platform that offers ACH payment services. Do you know why people prefer ACH over Wire transfers and other modes of payments? If you are confused about the safety and security part as well as the working procedures, you can walk away with this blog and know it!
What Is ACH?
The Automated Clearing House network is a US-based network that facilitates electronic bank-to-bank payment. Instead of utilizing wire transfers, paper checks, cash, or card networks to send money between bank accounts, you can use the ACH system. When you receive a payment, the Automated Clearing House, or ACH, network routes it to your bank account. ACH payments are also commonly referred to as ACH transfers or transactions.
Benefits of ACH Payments for Your Businesses
Businesses can get a number of significant advantages by sending and receiving payments using ACH.
1. Speed and ease
With electronic payments, it’s easy to send and receive money. You can pay anyone anywhere, letting you move more quickly. The ACH system is instantaneous, unlike checks which can be lost in the mail and have to be manually entered.
2. Low cost
If a business accepts credit cards, the fees are higher because most processing companies charge a fee as well as monthly and operational fees. Taking payments by ACH transfer is more cost-effective and beneficial for businesses that want to establish recurring payments with customers.
3. Pay remotely
Credit cards provide people with an alternative to a check for paying for goods. For customers who want to protect their personal information or do not have a credit card, ACH can be helpful. Zil ACH is a helpful and easy alternative for those customers who prefer not to give out their credit card information or do not have one.
ACH Payment vs Wire Transfer
With an ACH transfer, the money is transferred from a clearing house. This can be used for processing direct payments or direct deposits. Wire transfers allow for the movement of money from one bank account to another. ACH transfers are safer than certified checks, cashier’s checks, or personal checks. However, you should only receive or initiate ACH transfers from trusted entities. Zil ACH transfers, including online bill payments and direct deposit of paychecks, generally charge a small cost of fees for domestic and international wire transfers.
Categories of ACH Transfer
There are two main categories of ACH transactions. They are:
Payroll payments, government benefits, tax refunds, interest payments, and other payments sent to consumers by businesses or the government are commonly made via direct deposit.
Direct payment refers to the electronic transfer of money to send or receive payments from individuals and organizations. Examples include transferring cash to your clients or customers, purchasing, paying debts, and other transactional activities.
Why Do You Need ACH?
Is your business using ACH payments? In addition to being beneficial for businesses, ACH payments also require benefits for consumers.
ACH is a seamless way to pay for goods and services online. With ACH, the customer can quickly and easily use their bank account without having to mail out checks or risk getting into debt using a credit card.
They Can Be Automatic
ACH can be used to automatically debit your bank account each time you make a payment, saving you the hassle of keeping up with when an invoice is due and sending in the right payment.
Zil ACH payment solution keeps costs down and gives you more control and visibility over payments. You can easily manage and run a business to make life easier!