Don’t disregard ACH payments for your enterprise business. Here’s why.
As an enterprise business interacting with consumers across many sales channels, you’re a trailblazer of technology-enabled commerce. From EMV to mobile wallets and online transactions, the payment types you accept shape your customers overall experience—for better or worse.
Given the diverse range of consumers you serve, it’s a good idea to offer a variety of payment options. Thinking about how you can use payments to drive seamless buying experiences will support your efforts to grow your business and keep your customers happy.
Fortunately, enterprise businesses seeking more profitable, frictionless purchase and pay experiences have another, perhaps less-known, payment type to consider: ACH. Read on to learn more.
What is ACH?
ACH (automated clearing house) payments are electronic money transfers made between different banks via the Automated Clearing House network, one of the largest U.S. payment systems. Online bill payments, direct deposits from employers and government benefit programs, person-to-person payments, as well as the payment processing funds, are all delivered via ACH.
Because of its traditional uses, it may come as some surprise that ACH is becoming a more common way for enterprise businesses to accept payments from their customers. But it’s true. Payments volume for ACH continues to rise overall. According to the National Automated Clearinghouse Association, ACH transaction volume grew by 5.3 percent in 2017, reaching 25.6 billion and valued at $43.7 trillion.
How it works
ACH payments are similar to debit card transactions in that both withdraw funds from a customer’s checking or savings account. However, since these payments use the ACH network, not the card brand networks, they are not subject to interchange and network assessment fees. This is a huge benefit and a large differentiator. Using ACH, enterprises can reduce their associated processing costs by up to 80 percent.
An ACH transfer occurs in two ways:
- ACH debit transaction. Money gets “pulled” from an account, such as when you set up a recurring bill payment from your checking account. Debit transactions are typically free; your customers don’t have to pay a fee to use ACH.
- ACH credit transaction. Money gets “pushed” from one account into another account, as in the case of a direct deposit from your employer for your weekly paycheck or a PayPal “Friends & Family” payment. Credit transactions incur either a flat fee or a fixed percentage per transaction.
What are the benefits?
In addition to significantly lower transaction fees, enterprise businesses that employ ACH payments also enjoy several other benefits including:
Increasing customer convenience. Customers can enroll in ACH payments via a kiosk, portal, or website, without sharing a lot of personal information.
Integration with loyalty programs. Customers’ ACH accounts can be automatically linked to an enterprise business’ loyalty program for seamless access to their account and rewards.
Faster payment processing. ACH transactions provide a faster in-lane experience because the approval process is an in-house PIN validation, eliminating the need to call the networks for authorization.
Access to actionable data. Enterprise businesses can access insights into customers’ spending habits and use this information for more targeted marketing efforts.
Support for all sales channels. Whether customers shop online, instore, using their mobile device, or a combination of all three, they can pay via their ACH account on all platforms.
Lower non-payment disputes. ACH payments are typically disputed less often than credit and debit card transactions because the approval process is controlled by the enterprise business (see next point).
More control. You have control over the approval process since you determine which customers you want to be able to enroll in ACH payments at your business.
Easier recurring billing. Unlike checks, ACH is a secure and efficient way to facilitate recurring billing for your most loyal customers.
By adding ACH payment acceptance, you can turn your enterprise businesses into the disruptor in driving the most loyal customers to more trips, bigger shopping baskets, and greater rewards. It’s the ultimate way to enable a frictionless shopping experience, increase customer visits and spending, and keep the costs of payment acceptance in check. To learn more about your options, contact us.