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ACH vs. Check 21 – Which Is Right for You

July 26, 2021 • by shall

A merchant or business trying to decide the best electronic payment processing system may be interested in the differences between Check 21 and ACH. And while there are strong arguments for either, many believe that Check 21 works more in favor of businesses where ACH tends to favor consumers.

While this may not be true in all instances, many retailers have found that they prefer Check 21 because of some key differences between it and ACH. Regardless of the method, however, providing customers with a convenient and secure means of purchasing items should be a priority for every retailer.

How is ACH Different from Check 21?

There are a few key differences between these two such as when a payment is made to a merchant. With ACH, the payment processing is sent to the merchant by a broker whereas with Check 21 the payment is sent directly to the merchant by the client’s bank rather than through some sort of middle man or brokerage.

In this situation there is no broker or middleman receiving a fee for the service performed as there is within an ACH broker. In a payment made to an e check provider, the service fees are set by the merchant directly to Check 21. Using ACH, the fees are taken by the broker before the merchant receives payment.

ACH will handle consumer checks only while Check 21 can process business checks, cashier’s checks, personal checks and money orders. If there is a dispute a customer will have only 40 days to visit the local branch of his bank and fill out the proper forms. A stark contrast to this is the way the disputes are handled with ACH. These customers can dispute a transaction over the phone rather than person and have an additional 20 days to file a dispute.

It is of course necessary for a retailer to consider the needs of his customer base when choosing a payment processing system. Allowing a customer to use a variety of payment methods, like online payment processing, that can be processed quickly and efficiently is good not only for the consumer but for the business owner as well. The faster the funds can be transferred the better it is for everyone.

In addition, no business owner wants to pay additional fees for services if they can avoid it. Because of this many retailers have chosen Check 21, but that does not mean that it is the right choice for every merchant processing account. Read how ACH can help your business here.

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