What Is ACH Payment and How Does It Work?
November 29, 2021
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December 17, 2021
E-checks and business ACH payments are very similar. The terms are often used interchangeably. It is important to note; however, that eChecks and ACH payments are not exactly the same thing. In this article, we’ll describe key differences between the two and unpack how you can benefit from both of these services.
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Back to Basics: What Are the Key Differences Between Business ACH Payments and eChecks?
ACH, also known as Automated Clearing House, refers to a network that facilitates the process of moving funds electronically from one bank to another. eChecks, which stand for “electronic checks,” refer to a one-time transaction and replace the use of traditional paper checks. Much like paper checks, eChecks are not the bank’s responsibility but provide a much more secure platform through which funds can be transferred, making it the perfect solution for small to medium-sized businesses. Although the bank takes limited responsibility for eChecks, the checks themselves are still protected under the same laws and regulations as traditional paper checks.
How Do eChecks Work?
eChecks save your business time, money, and resources by alleviating the headache of paper payment processing. The eCheck process encompasses 4 key steps:
- Request Authorization. The first step in the process is getting authorization from the customer to effect the transaction.
- Set up Payment. After gaining authorization, the business proceeds by adding the payment info to its payment software.
- Finalization and Submission. Once the software has collected all of the necessary information from the customer, the business saves the information and the ACH process begins.
- Payment Confirmation and Funds Deposited. The bank account automatically withdraws the payment and the customer receives a payment receipt from the online payment software. The business then receives the payment, with the merchant account receiving the deposit anywhere from three to five days after the ACH payment is initiated.
If you’re not sure whether to choose business ACH payments or eChecks for your business, we’ve got you covered. Let’s explore some of the unique benefits of each service:
Benefits of ACH for Payment
- Ability to accept ACH payments instantly
- Greater security measures to reduce fraud/account breaches
- Lower cost as processing fees are significantly reduced
- Reduced risk of human error
- Saves time and resources with the possibility of recurring billing
Benefits of eChecks
- Offers ease and convenience with automated payments
- Effortless global payment: ability to pay from anywhere, at any time
- Security features like online identity authorization through digital signature, duplicate check detection to prevent fraud, and fund verification software to ensure the funds have not been tampered with
- Seamless integration with most accounting software
- No cost to receive funds
Whether you run a small, medium, or large-sized business, it’s important to know the difference between ACH payments and eChecks, and how each service can benefit your business in different ways.
Kapital Solutions offers you Kapcharge: the most secure and robust payment processing gateway on the market today. Enjoy the comprehensive risk management know-how that makes us experts in the fields of due diligence and fraud prevention. We engage with you, understand your business needs, and closely monitor all your transactions, so we can optimize the reduction of threats fraudulent actions.
Our unique customized reporting model provides you with seamless and detailed reports. So, you can have a thorough understanding of both payment and revenue traffic. The combination of technological innovation and industry knowledge results in simple and quick online integration for merchants with financial institutions.
Ask for your demo presentation today. Get in touch with the expert team at Kapital Solutions.
Looking for ACH or eChecks Payment Processing?
