The Automated Clearing House or ACH form of payment is one that is often considered essential, but doesn’t get a lot coverage in the press. It’s more of a workhouse, capable of processing huge amounts of transactions in a short period of time by doing the work in large batches for increased efficiency.
But one trend has been emerging a lot in recent years, and that’s the fact that if you are a business that transacts with other businesses, ACH payment is the way you want to financially interact with other companies. The reasons for this are simple; it’s a faster, more cost effective, more efficient way for companies to deal with each other.
With a retail customer conducting a purchase, the transaction needs to take place at that moment a customer decides to buy a product. With businesses however, no such imperative exists. Once two businesses have struck a deal, the logistics of payment can be set aside for another time. This is where the strengths of ACH payment really shine.
The cost of an ACH transaction is much lower between companies than it would be through the use of a credit card or other means of payment. Part of the reason for this is that “batch processing” technique that ACH payment uses. Once money is exchanged, an ACH waits until the appointed time, and then the transaction is handled along with many other transactions. This completely eliminates the need for extra costs for on-demand transactions.
This even gives vendors the opportunity to exert more control over their payments. Schedules can be set, with automatic payments and withdrawals made if a regular payment schedule is possible between two interacting businesses. This creates an enormous amount of control and convenience between businesses where the “I want it, and I want it now,” mindset of a retail customer is not an issue.
Posted in ACH on Aug 23, 2016