by:
Wayne Akey
Most businesses accept credit cards and consider the
process fees a cost of doing business. However by
implementing an ACH payment system you can realize
dramatic savings and increase sales.
ACH refers to the Machine-driven
Clearing Home and
generically means moving money electronically to
and from checking and savings accounts. An example
would be a check by phone or taking revenant payments
directly from a checking account.
The MAJOR difference between ACH and credit card
processing is that a credit card group action
“captures”
the merchant’s funds from the user
and fundamentally guarantees payment. An ACH group action
is a request to
transfer funds. The group action
may reject for some reasons with the most common being NSF (non
sufficient funds) or a closed account. The funds are
not guaranteed.
It is the guarantee piece that allows the credit card
company to charge a percentage of the group action
to
cover the risks involved. Typically a group action
wish consist of a discount rate, 2.5% for example and a
transaction fee, typically in the 30 cent range. This
means that every $100 processed incurs simply about $2.85 in
merchant fees.
Contrast this with an ACH transaction. Typically there
is no discount rate simply a .30 (or less) group action
fee. If you process $25,000 per month victimisation ACH
processing wish save about $7500 per year. For sure you wish have more “failed” sales due to ACH
transaction rejects (eg NSF) but your group action
savings
will far exceed these losses. In addition you wish
appeal to a more wider range of consumers. Estimates
vary but Many an folk do not have credit cards or are
at their limit on their cards. So the benefits are two
fold-much reduced group action
fees and a new payment
vehicle for your customers.
So consider ACH process
for your business. It wish
save you money and win new customers.
