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Shawna MesherMay 20, 2024 4:06:30 PM6 min read

5 Benefits To Using ACH

5 Benefits to using ACH

Processing fees are an inevitable part of conducting financial transactions for any business. While processing fees vary depending on transaction volume, payment method, and service provider, there are ways business owners can maintain their bottom line.

By understanding and effectively managing processing fees, you can mitigate costs, enhance profitability, and provide greater value to your customers. There are many ways to go about doing this such as including the processing fees in the price of your products and services, offering discounts for alternate forms of payment, and encouraging the use of Automatic Clearing House (ACH) payments.

We'll explore the numerous benefits of ACH for businesses, from slashing processing costs to simplifying administrative tasks and enhancing customer satisfaction. Additionally, we'll offer practical strategies for encouraging customer adoption and maximizing the value you get from ACH payments.

What is ACH and why use it?

ACH is a secure electronic way to move money from one bank account to another, similar to a digital check. It’s a seamless and efficient way to move money. Transactions are encrypted and PCI compliant, ensuring the safety of your customers' financial information.   

ACH saves you thousands of dollars in interchange/processing fees and several trips to the bank to deposit paper checks.

What is Interchange and why are credit card processing fees so high?

Every credit/debit card transaction consists of three parts: interchange, assessments, and your processor rates. Interchange + Assessments + Processor Rates/Fees = Processing Cost.

Interchange is the largest component of costs. There are hundreds of interchange categories based upon the card used for the transaction, each with a rate and fee associated. The interchange cost for any given transaction depends on the category for which the card “qualifies”.  Interchange costs are non-negotiable, they are determined by the card issuing brands, collected by your card processor, and paid back to the card issuers. So your processing company cannot keep those fees.

Assessments are also fees paid to the card brands, they are also non-negotiable.

Together, interchange and assessments can be thought of as the “wholesale” cost of credit card processing.

Processor Rates are the processor's fees on top of interchange and assessments. Any fee that is not interchange or assessments is part of the processor rate. That includes monthly or annual fees, statement fees, PCI compliance fees, per-transaction fees, etc.

As you can see card processing comes with a lot of different cost components that ACH doesn't have. 

Business Benefits To Using ACH

  1. Cost-Effective Transactions

    Compared to traditional credit card processing fees that reach as high as 5%, ACH boasts significantly lower rates, typically under 1%.  For businesses dealing with high transaction volumes, the savings generated by switching to ACH is substantial, contributing directly to the bottom line. This is especially true for businesses dealing with ‘big ticket items’ such as hot tubs, pools, hearths, billiards, jewelry, etc. or recurring payments for services and subscriptions. 

  2. Predictable Cash Flow

    By transitioning customers to ACH payments, businesses enjoy more predictable cash flow. With funds transferred directly from customers' bank accounts, there's no need to wait for checks to clear or worry about declined payments. This stability enables better financial planning and minimizes the risk of cash flow disruptions.

  3. Simplified processes

    Beyond cost savings, ACH streamlines administrative processes, saving valuable time and resources. Unlike credit card payments that require regular updates of expiration dates and manual reconciliation, ACH payments offer a “set-it-and-forget-it” approach. Once a customer's bank account information is on file, transactions occur seamlessly, reducing the burden on administrative staff and minimizing potential errors.This saves valuable time and resources that are redirected towards more strategic initiatives.

  4. Improved Customer Experience

    In the competitive landscape of modern business, customer experience reigns supreme.  ACH payments contribute to a smoother experience for your customers. With reduced errors and the convenience of automatic payments,you and your customers will sleep easy knowing their transactions are processed efficiently and securely. This fosters trust and loyalty, leading to a more positive customer experience.

  5. Future-Proofing Your Business

    Beyond immediate benefits, ACH lays the groundwork for long-term business growth. Once a customer's bank account information is on file, future transactions become effortless. This facilitates recurring payments, subscriptions, and future purchases, fostering ongoing customer engagement and retention.

But How do you get customers to buy-in?

While ACH offers a plethora of benefits, it's crucial to secure your customers' buy-in. Here are some strategies to incentivize them to embrace ACH payments:

  • Discounts: Offer exclusive discounts or cash back rewards for customers who choose ACH as their preferred payment method. This financial incentive makes ACH a more attractive option.
  • Simplified Payment Options: Highlight the ease and convenience of ACH payments. Promote the fact that it eliminates the need to manually enter credit card information or worry about forgotten checks.
  • Focus on Security: Educate your customers about the robust security features of ACH transactions. Emphasize that ACH payments are encrypted and PCI compliant, ensuring their financial information remains safe.

By implementing these strategies, you demonstrate your commitment to customer satisfaction and encourage them to discover the benefits of ACH for themselves.

Motivating Employee Engagement

Harnessing the power of ACH also inspires internal motivation and engagement. By introducing friendly competitions or incentives for employees to enroll customers in ACH, businesses foster a culture of innovation and collaboration. These initiatives not only drive ACH adoption but also create a dynamic and motivated workforce focused on achieving collective goals.


In conclusion, ACH represents more than just a payment method; it's a strategic tool for optimizing business operations and driving sustainable growth. By leveraging the numerous benefits of ACH, businesses achieve significant cost savings, enhance customer experience, and streamline administrative processes. With the right implementation strategies and a focus on customer education, ACH payments unlock a world of opportunities for businesses of all sizes. Embrace the power of ACH and watch your business thrive!

Frequently Asked Questions

How do we make sure funds were deposited after the transaction was done?

You can review an invoice and check the current payment status. If the payment has been processed, you will see that the status is updated to “settled”. Additionally there is an ACH clearing search screen where you can review the current status of all ACH payments.

Do I have to check the bank statements for each transaction?

ACH payments are treated just like credit card batches. All ACH payments for the day are lumped into a batch and deposited together.

If funds aren't available, we will not be able to know that at time of sale, correct?

Correct, unlike credit card processing, ACH is sending a payment request to the bank, you will need to wait to find out if funds were available and the transaction was successful. ACH is great for deposits and other payments but maybe not for cash and carry transactions, you want to make sure you have your money before delivering goods and services.

Can a transaction be declined for lack of funds like a credit/debit card transaction?

Yes, these types of transactions will return on the ACH clearing search as Failed.

What are the processing limits that I need to figure out to be able to offer ACH?

Typically, your merchant account provider will request the following information to set up your account to process ACH payments:

  • Single Transaction amount:

- What is the largest amount in a single transaction you expect to process? 

  • Daily Total Transaction amount:

- What is the total amount in a single day you expect to process?

  • Monthly Total Transaction amount:

- What is the total amount in a month you expect to process?

  • Daily transaction count:

- What is the total count of transactions in a single day you expect to process?

  • Monthly transaction count:

- What is the total count in a month you expect to process?