ACH, or Automated Clearing House is a secure network that connects all financial institution in the United States. It allows transactions for payments and debits to be completed electronically. Many businesses want to provide flexibility to their customers by offering a variety of payment options. When using ACH processors, they enable their customers to make payments by electronic check, debit cards and electronic funds transfers. There are several advantages for them to do this. The first is that they have faster access to funds than ever before. Traditionally, merchant banks would not release funds until there was confirmation that the account being accessed had the appropriate amounts.
This could take up to three weeks. Once ACH processors make the appropriate entries and confirm funds availability, the transaction can be completed within one to two days. As the entire transaction takes place electronically, it is also more convenient for businesses. They do not need to be concerned about returning unsigned checks, maintaining a staff that is responsible for double checking the account information, filling out deposit slips and taking them to the bank for deposit. Money is transferred directly into the proper account with almost no manual intervention needed. This also makes it cost effective.
If your business is just beginning to research ACH processors, consider contacting the financial institution where your accounts are held. The customer service representatives are usually familiar with the various business services and may be able to provide you with a list of providers or some recommendations on how to start your search. They may even have a list of questions to ask. The primary role of third party processors is to receive files in the approved format from the Originating Depository Financial Institution (ODFI), process them and deliver them to the Receiving Depository Financial Institution (RDFI).
Not all ACH Processors are created equal. The type of services offered and processes used to complete transactions vary from one firm to the next. Choose an organization that has a history of providing quality customer service. The products they utilize should simplify your day-to-day duties rather than complicate them. Secure batch file processing, web payments and real-time processing are points you should ask about before signing an agreement. The Automated Clearing House network allows electronic transactions to be completed quickly and efficiently. Businesses that utilize the network can receive or send payments and know that the funds are being transferred securely.