We all know that credit cards and debit cards are outpacing cash currently. But why is it a good idea for a business to consider other methods to make and receive payments? The reason is associated with the high processing costs involved with debit and credit card transactions. A great alternative to these high rates is ACH (Automated Clearing House). The ACH network is the main source of transactions in the U.S. where money moves from one bank to another trough payments made via ACH transactions. The ACH network is one of the largest and safest payment systems in the world. Check out the advantages ACH billing services can have for your business.
Lower Transaction Fees
One of the biggest advantages of ACH is very low processing fees. Through ACH money is moved between the banks of an individual and/or business through a clearinghouse, which keeps the cost of transactions low. For example, typical credit and debit card processing fees range from 2.00%-2.75% and would cost an average $2.50 for a $100 transaction. On the other hand, the ACH fees of Gulf Management systems are typically only $0.50 per transaction. For businesses that process thousands of transactions, these fees will add up!
ACH was established to make money transfers efficient and simple. There’s no more need to worry about processing checks. As a business owner, your customers also don’t need to worry about forgetting about their monthly payment. With ACH they are easily able to set up recurring or one-time payments via ACH. Also, since ACH deals with two banks, there are no longer issues with credit cards not processing for simple reasons such as a customer losing their card, the card being stolen, etc. There is less to worry about for both the business and customer.
Unlike dealing with checks, transfers of ACH are direct with no middlemen. There is no more worry about checks being misplaced or forged. Some customers might be concerned with submitting their bank account information. To deal with this, some ACH payment processors carry out a two-way validation to confirm the identity of both individuals. With Gulf Management Systems, our ACH gateway features allow businesses to validate bank information and authenticate consumers. This is a great security aspect for both the customer and business.
ACH benefits business with a subscription model such as gyms, tanning salons, and just about anyone. This allows businesses to accept recurring payments hassle-free with low transaction fees. ACH is a great choice because there is a low flat fee per transaction. In the past, the more transactions businesses made the more they were charged in fees. With recurring payments, there is also less invoicing and emailing clients. Businesses are also able to enhance their social image by reducing their use of paper and other materials.