Setting Up ACH Payment Processing For Your Business

Jan 10, 2020

ACH stands for Automated Clearing House and is a simple method by which funds can electronically be transferred from one account to another in the US. Its functions are overseen by both the federal government and the National Automated Clearing House Association (NACHA) to ensure that rules are up-to-date and sensitive payment information stays secure.

ACH payment processing can give your business the ability to accept a substitute payment for cash, credit, debit or checks for goods and services. This is especially important for online businesses. Processing fees for ACH payments vary, but are usually categorized under electronic payments by most banks.

The Two Types of ACH Payment Processing

There are actually two different types of ACH payment processes. These are direct ACH deposit and direct ACH payment. The difference between these are whether funds are being transferred in or out of an account.

For the purpose of accepting payments from customers, most businesses will accept ACH deposits. This means your customers are authorizing a transaction from their account into yours. However, ACH deposits can also refer to the payment method you might choose to disperse wages to your employees.  

A direct ACH payment differs from a deposit because instead of money going into your account, it’s money coming out of it. For businesses, this can be a helpful way to auto-pay bills on a monthly cycle to have one less thing to worry about.

Are ACH Payments a Good Option?

ACH payments can be a great option, especially for online businesses, but any business can make use of the advantages. If you have a business that requires recurring payments from your customers, such as a subscription, ACH payments can be superior to credit or debit cards. This is because cards have information that expires, such as the date or even the number might be changed in the instance of a lost card. 

If your company tries to put through a transaction with outdated information, it can be blocked and lead to a poor customer service experience. Once approved, ACH payment information will never expire and rarely change.

ACH payments can also be more cost-effective, especially if you conduct above a certain number every month. Typically speaking, credit card processing fees will almost always be higher for merchants than ACH payment processing fees.

You can also expect to have your transactions processed the same day as they were made. While some banks may charge additional fees and you may need to be aware of cutoff times, same-day processing can help improve the efficiency of your transactions. 

If you decide the ACH payment processing is a good option for your business, you will need to work with a third-party processor who provides the service. Depending on your needs, you may opt for a standalone ACH processor or a payment gateway or hybrid provider.

A standalone processor will have lower fees but will be limited in the services that they can provide you, including alternate payment methods. A payment gateway or hybrid provider will charge higher fees but will be able to provide you more options and are usually easier to scale up as your business grows.

In order to make the final decision, it’s important to shop around with different providers and understand their pricing. Once you decide on which option is right for your company, ACH payment processing can help make things simpler for your business.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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