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How ACH Processing Works to Your Advantage

Not many are aware but every time people pay electronically, the one thing responsible for making transactions happen is ACH processing. ACH stands for Automated Clearing House. In essence, ACH processing is an electronic payment system or network that is utilized by government organizations, businesses, financial groups, and individuals. This network is capable of processing huge volumes of debit and credit transactions. So every time you pay for the clothes and shoes you purchased in the mall using either your credit or debit card, you should be thankful that there is an electronic network that makes things easier for both the buyer and the seller.

Before you can fully understand how ACH processing will benefit you, it is better to determine its uses first. The primary use of ACH processing is to enable direct deposits of social security, payroll, tax refund and other government benefits to individuals. This is also important in the processing of direct payments of utility bills, mortgages, insurance premiums, loans and other consumer bills. You should also know that e-commerce, e-checks, and business-to-business electronic payments are all made possible through ACH processing.

But if there is one thing that must be emphasized, it is the fact that ACH processing benefits both big corporations as well as individuals. For one, this type of system makes payments and deposits happen more efficiently and faster as opposed to using paper checks. Besides, many people will agree that electronic payments can remove the hassles of paying your bills one by one. Aside from making things simpler, you also end up saving time and effort if you use your debit or credit card when paying for everything. In a place where mugging and petty thefts are common, using your credit card or debit card to purchase huge and expensive items is a lot safer than bringing cash, especially in places where paper checks are not honored.

As mentioned earlier, ACH processing can also benefit businesses and corporations. If your establishment is open to payment through credit and debit cards, more customers will be inclined to use your store or company instead of others that do not provide various payment options. ACH processing also helps big businesses recoup their money in a shorter period of time. This will surely boost their cash flow. Moreover, if companies use electronic checks, this will help improve their credibility, which is helpful in bringing more business and clients.

Posted in ACH, ACH Processing, ACH Service on Oct 23, 2009