How Do ACH Payments Work? The Complete eCommerce Guide

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 How do ACH payments work

Accepting ACH payments is another powerful way eCommerce businesses can reduce that dreaded cart abandonment rate.

Let’s face it: if your checkout process is even the slightest bit cumbersome, it will, at best, frustrate your customers or, at worst, drive them to a competitor.

That’s why eCommerce business owners must make the checkout and purchasing process as frictionless as possible.

It’s that age-old challenge of helping buyers feel secure and compliant with payment standards while making the process as simple and easy as possible.

One of the best ways to streamline payment is to offer as many payment methods as possible, including ACH payments.

In this blog post, we will discuss the following:

  • What ACH payments are
  • How they work
  • Why many businesses are using them

We will also explore the benefits of using ACH payments and list some platforms that accept them.

What are ACH Payments?

ACH payments are electronic funds transfers (EFT) that are processed through the Automated Clearing House Network.

ACH payments move money between banks, credit unions, or TPPs (typically credit card processors) electronically. This transfer allows businesses to accept payments from their customers quickly and securely.

Accepting ACH payments is also an excellent way to offer your customers added flexibility and convenience. Alternatively, you can utilize ACH to pull funds from customers if they provide you with the required details of their payment account.

How Do ACH Payments Work?

When a customer initiates an ACH payment, their bank sends a request to the merchant’s bank with the customer’s account information.

The merchant’s bank then verifies that the payment is valid and electronically transfers the funds from the customer’s account to the merchant’s account. If you already accept credit cards, you may be able to accept ACH payments right now.

Most of the time, companies can accept occasional ACH payments from their customers by utilizing their traditional bank accounts. They provide the customer with the account details required, and the customer then initiates the payment for a small fee.

Also, you may be able to receive ACH payments through banks and credit unions at no cost, but you’ll often be required to pay a fee of $5 to $15 for every incoming transaction. Additionally, these types of payments generally take longer to post to your bank or credit union account.

If you are an eCommerce company or small business and plan on accepting ACH payments frequently or want to allow your customers the convenience of setting up recurring ACH payments without fees, a third-party payment processor could be the answer.

Your company will be charged a small fee, similar to the transaction fees you are charged when you accept credit cards.

Why Many Businesses Choose ACH

ACH payments offer several advantages over other forms of payment, such as credit cards. For starters, ACH payments are typically cheaper to process than credit cards.

In addition, they offer enhanced security, savings opportunities, and greater support for remote teams.

More Benefits of ACH Payments

ACH payments offer several benefits that make them an attractive option for businesses, including:

  • Prevents fraud – With ACH payments, the customer’s bank verifies the payment before transferring the funds. This helps to reduce fraud. It also prevents customers from being charged for unauthorized transactions.
  • Savings opportunities – ACH payments are typically much cheaper to process than credit cards, which can save businesses money in processing fees.
  • Greater support for remote teams – ACH payments allow businesses to collect payments from customers at any time, from anywhere. This makes them especially attractive for businesses with remote teams or customers located in different countries.
  • Recurring billing – ACH payments can be set up to process automatically on a regular basis, making it easier for businesses to manage their recurring billing cycles.
  • Reduce human error and increase time savings – The automated nature of ACH payments makes it easier for businesses to keep track of transactions, reducing the chance of human error and streamlining their payment processing.
  • Security – ACH payments are generally considered more secure than other forms of payment. With the additional layers of security provided by the banks involved in the transaction, customers can rest assured that their private data is safe.
  • Lower cost – ACH payments can be much cheaper than traditional payment methods such as credit cards. This makes them an attractive option for businesses looking to keep their costs low.
  • Faster processing time – ACH payments are usually processed within a few days, making them faster than other forms of payment.
  • Convenience – With ACH payments, customers can make payments from the comfort of their own homes. This makes them an ideal solution for businesses looking to offer a convenient payment option for their customers.

Cost of Accepting ACH payments

The cost of accepting ACH payments varies depending on the provider, but they are typically much cheaper than other forms of payment, such as credit cards.

Many providers charge a flat fee per transaction, while others may offer discounts for higher-volume transactions. In addition, the rates may vary between purchases in person with a card and purchases without a card present online.

To give you a general idea of the cost of ACH payments, Wave charges a flat fee of 2.9% plus $0.60 per transaction. Meanwhile, Braintree charges 2.59% plus $0.49 per transaction, and Square charges 2.9% plus $0.30 per transaction.

ACH Payments vs. Wire Transfers

Wire transfers are similar to ACH payments in that they allow customers to transfer funds directly from one bank account to another. However, wire transfers are typically more expensive and take longer to process than ACH payments. In addition, wire transfers are usually not automated, so customers must manually request each transfer.

Why would buyers be hesitant to transition to digital payments?

Although digital payment methods such as ACH payments offer many benefits, some customers may still be hesitant to transition from traditional forms of payment such as cash or checks.

This can be due to concerns about the security of digital payments or a lack of familiarity with the technology.

Why Would a Business Choose Credit Cards over ACH?

Credit cards may still be the preferred payment method for some businesses as they are widely accepted and offer customers more flexibility in terms of payment options.

In addition, many providers also offer reward programs to incentivize customers to use their credit cards. Still, credit card payments can be significantly more expensive than ACH payments, so businesses should weigh the costs and benefits carefully before making their decision.

Platforms that accept ACH payments

There are several platforms that accept ACH payments, and each one offers different features, such as secure payment processing, convenience for customers and businesses, and discounts on processing fees. It’s important to research each platform to determine which one is the best fit for your business.

Here is some information about some of the more popular options out there to help you decide which can work best for you:

  • Wave – Wave is an online invoicing and payment solution that allows businesses to accept ACH payments. The platform offers low processing fees, support for multiple currencies, and the ability to set up recurring payments.
  • Square One – This popular choice is a mobile payment platform that accepts ACH payments, as well as other forms of payment. The platform features free account setup, mobile payment options, and secure data storage.
  • Braintree – Braintree is a payment gateway that allows businesses to accept ACH payments as well as other forms of payment. The platform offers support for recurring billing, refunds, and secure data storage.
  • Zelle – This online money transfer platform allows businesses to accept ACH payments from customers. The platform offers support for multiple currencies, as well as the ability to send and receive money in real time.
  • Stripe – Stripe is an online payment processing solution that lets businesses accept ACH payments from customers. The platform features built-in fraud detection, integrated subscription billing, and support for multiple currencies.

How to Get Started Taking ACH Payments

If you are interested in taking ACH payments for your eCommerce business, it is important to research the different payment processors available to find one that best fits your needs.

It is also important to ensure that all security protocols and regulations are followed when processing payments so that personal information remains secure.

Finally, it is important to inform customers about how their payment information will be used, stored, and processed. This can help build trust with customers and may encourage them to make more purchases in the future.

The Breakdown

By accepting ACH payments, you can open up a new revenue stream for your eCommerce business while providing customers with an easy and secure way to make payments. With the right payment processor and the right security protocols in place, you can begin accepting ACH payments with confidence.

However, it’s important to research each provider before making a decision in order to find the best fit for your business. By considering all your options, you can make an informed decision and start accepting ACH payments in no time.

Thankfully, with the powerful and accessible features of modern payment processors, there’s never been an easier time to implement ACH payments as an option for your eCommerce business.

Next Steps: An Inventory Management System

If you are a product-based eCommerce company, you’ll need an inventory management system to ensure that your business is running smoothly.

SkuVault provides easy-to-use Inventory Management Software that’s specially designed for eCommerce businesses.

With powerful features like automated purchase order generation, real-time stock updates across multiple sales channels, and detailed reporting capabilities, you can be sure that your inventory is always on track and your orders are fulfilled quickly and accurately.

To learn more about SkuVault and how our software can help you grow your business, visit our features page or request a demo via the link on this page.

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Matt Kenyon

Matt Kenyon


Matt has been helping businesses succeed with exceptional content, lead gen, and B2B copywriting for the last decade. When he’s not typing words for humans (that Google loves), Matt can be found producing music, peeking at a horror flick between his fingers, or spending quality time with his wife and kids.