What is ACH Payment Processing for Small Businesses

ACH Payment Processing helps your small business process payments quickly and securely, giving you an edge over your competition. ACH stands for “automated clearing house”. This quickly processes each transaction electronically, eliminates the need for a paper check, and costs less than credit card processing.

We field questions every day about how ACH Payment Processing works. We’ve chosen the most common ones to help you more clearly understand how ACH Payment Processing can help your small business.

  1. How does ACH Payment Processing work?

  2. How can ACH Payment Processing help my business?

  3. Is enabling ACH Payment Processing worth it?

  4. How do I get access to ACH Payment Processing?

How Does ACH Payment Processing Work?

ACH Payment Processing can help your small business with quick and secure electronic payment processing. ACH payments are used to move funds from one bank account to another. The funds move expediently through the ACH Network, with the funds deposited into the receiving bank account within a few business days. It moves funds without needing to use a physical check, credit card, or debit card.

ACH Payment Processing for small businesses is particularly helpful for paying recurring bills. Direct Payment through ACH can help customers pay for services. They can pay through ACH Credit or ACH Debit. ACH Credit pushes the funds to an account, while ACH Debit debits the account. A customer would use ACH Debit for recurring bills they want to put on autopay. ACH Credit can be utilized for making a one-time payment.

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How Can ACH Payment Processing Help My Business?

ACH Payment Processing saves your business time and money by allowing you to easily track expenses and cash flow. This can be particularly helpful if you use recurring billing or invoicing. These are free for customers making them a better alternative to wire transfers. Best of all, it is less costly, saving your business money.

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1. Better ACH Payment Processing Fees

If you use a traditional credit card processor, you could be paying more through extra processing fees. Interchange rates for each type of credit card vary but the more cards your business processes through traditional means, the more you’ll pay.

ACH Payment Processing is less expensive than paying with a credit card. Your small business will pay 1% per transaction, no matter the size of the transaction. You’ll be able to easily track each incoming payment while saving on processing fees.

2. Easy ACH Set Up for Customers

You’ll find that many customers prefer ACH Payment Processing because it’s user-friendly. To use ACH Payment Processing, all you need is your customer’s banking information. With the one-time entry of their account and routing numbers, your customers can pay your invoices at whichever interval you choose. Each payment will be automatically deducted from their account, making timely payments easy. Customers no longer have to manually pay invoices and it doesn’t cost them any extra.

3. No More Expired Credit Cards

Unlike credit cards that regularly expire or have the number changed after a suspected fraud attempt, your customers’ bank account and routing number will likely remain the same for years. This means you won’t have to chase down updated payment information. You’ll save time on manual operations tasks by letting customers set up ACH on their own.

Is ACH Processing Worth It?

A little math is all it takes to find out if ACH Payment Processing could help your small business. Determine the cost with your payment provider. Then, add up how much you’re spending on interchange and credit card processing. Compare the two to see how much your small business can save.

For example, say a marketing agency has 10 clients that are billed $2,000 each per month. With most credit card processors, there would be a 2.9% + .30¢ fee to process each transaction. At this rate, it would cost your business $583 a month to process these invoices through traditional credit card processing.

With Stax, you would only pay $100 to process the same 10 payments. That’s a savings of over $483 a month and almost $5,800 a year. We know for small and medium-sized businesses, every penny counts – and that’s a lot of pennies.

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How Do I Get ACH Payment Processing?

You can access ACH Payment Processing and all of its benefits through a payment processor. Payment processors facilitate the actual payment and deposit the money directly into your account. Using this, instead of traditional credit card processing, lowers your overall processing costs.

Stax is a subscription-based ACH Payment Processor. With a subscription-based payment processor, you’ll pay a one-time transaction fee no matter how big the transaction is. Whether your customers need one-time payment or recurring billing, Stax can handle all of your payment processing needs. You can easily set up ACH through a virtual terminal and accurately track your payments.

Stax customers can contact an account manager and request to turn on ACH Payment Processing. Customers can also do this by logging into the Stax dashboard and clicking on the Apps section. Find and click the ACH app and click the Contact button to reach our support team.

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