Many enterprises now offer recurring ACH as an option when agreeing to payment terms – especially for service contracts or other accounts with regular or scheduled billing. But how can ACH benefit your business?
ACH Transactions, explained.
Automated Clearing House (ACH) transactions allow for direct account-to-account transfer of funds between financial institutions, individuals or companies. Recurring ACH payments are authorized by the customer, who agrees to allow the vendor or service provider to initiate payment from their account automatically according to a predetermined schedule.
- Recurring ACH payments are an efficient way to streamline the payment process. Payments are set up on a schedule and automatically withdrawn from the customer’s bank account. This eliminates many of the delays associated with traditional payment methods – meaning you’ll get paid faster.
- ACH payments help businesses retain customers by removing the burden of frequent bill payment from consumers. In fact, one study found that customers who use recurring ACH as a method of payment are 14% less likely to leave their current vendor or service provider and 86% more likely to continue making their payments in a timely fashion.
- The cost of acceptance for recurring ACH payments is significantly lower – often half the cost of that incurred through the processing of traditional payments. Because transactions are initiated directly between accounts, ACH eliminates the fees and costs associated with processing and handling traditional payments. You’ll experience significant savings, which can then be passed on to your customer.
- Automation of ACH reduces your reliance on manpower. Recurring ACH payments are set up to occur automatically, relieving your staff from manual processing.
- ACH transactions offer increased security. Because there are no physical articles which require review or processing, you’ll reduce security issues and eliminate risk associated with the acceptance of traditional payments, such as paper checks.
- ACH is environmentally responsible. ACH payments are a green technology – they are initiated and processed electronically, requiring no paper waste. This earth-friendly method will not only reduce your carbon footprint, it will reinforce customer perception of your business as a responsible steward of the earth.
Offering your customers the ability to pay via recurring ACH is a win-win situation. You’ll experience increased customer loyalty and reduced costs – all while providing your customers with a convenient and environmentally-friendly payment option.
Originally published September 15, 2014.