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| ACH Payments |
In day-to-day, of course we will not be separated from the activities of the payment transaction. However, have you ever heard of ACH Payments? According Wiki ACH or stand from Automated Clearing House is an electronic network for financial transactions in the United States. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, payroll and vendor payments.
ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Debit transfers also include new applications such as the point-of-purchase (POP) check conversion pilot program sponsored by NACHA. Both the government and the commercial sectors use ACH payments. Businesses increasingly use ACH online to have customers pay, rather than via credit or debit cards.
Very Familiar
Most Important All About ACH Payments, FAQ and Answers - Most consumers are already familiar with these payments, although they might not use technical jargon to describe them: when employers pay through direct deposit or consumers pay bills electronically out of checking accounts, the ACH network is probably responsible for those payments. According to NACHA, the Electronic Payments Association behind the ACH network, over 23 billion ACH payments were made in 2014.Most consumers are already familiar with these payments, although they might not use technical jargon to describe them: when employers pay through direct deposit or consumers pay bills electronically out of checking accounts, the ACH network is probably responsible for those payments. According to NACHA, the Electronic Payments Association behind the ACH network, over 23 billion ACH payments were made in 2014.
Basics Concept of ACH
ACH payments are simply electronic transfers from one bank account to another. Common uses include:
- A customer pays a service provider
- An employer deposits money to an employee's account
- A consumer moves funds from one bank to another
- A business pays a supplier for products
Instead of generic check information on a bank statement ("Check #3509 for $45.82" - what was that for?), you see the payee's name without the need for further research. That makes it easier to sort or categorize transactions with your financial software.
ACH transactions can be electronic from start-to-finish, or they can happen when a paper check is converted and processed electronically.
Why Most Businesses Like ACH Payments ?
Most Important All About ACH Payments, FAQ and Answers - Businesses benefit from sending and receiving funds with ACH. When customers pay by check, businesses need to wait for the mail to arrive - then they need to get the check to the bank. Payments get lost sometimes, and entering those payments into a recordkeeping system is labor-intensive. Electronic payments are received more quickly and reliably, and there’s no need to forward checks to the bank and wait a few days to find out which checks bounced (however, the ACH does not give you a real-time approve/deny response like a credit card terminal does).
For businesses that accept payment by credit card, it costs less to process an ACH transfer than it costs to accept a credit card payment. Especially when collecting recurring payments, those savings add up, and automating those payments only increases the benefits.
Finally, businesses can accept payments by ACH remotely (although the same is true for credit cards). If your customers don't have credit cards or prefer not to use them, ACH can add flexibility.
Why Consumers Like Paying with ACH ?
Consumers also benefit from ACH payments. There’s no need to write checks and get them into the mail on time. If using automatic ACH payments, they do not need to keep an eye out for bills - everything runs on autopilot - for better or worse.
Another F.A.Q in ACH Payment
ACH payments can also return as NSF (non-sufficient funds), even if the transaction initially goes through. Unless you're set up for check verification or check guarantee (both of which typically include a hefty per transaction charge), your ACH payments can still return NSF
2. Is Ach the same thing as direct deposit?
Direct deposit is most commonly used for payroll, Social Security, and pension payments. It also is used for investment dividends and tax refunds. Direct deposits are made through a system called Automated Clearing House (ACH).
3. What is ACH Hold?
If you've ever signed up for direct deposit of your paycheck through your employer, or paid a bill with an automatic bill payment, your transaction has been processed by ACH (Automated Clearing House). When an ACH hold is placed on your bank account, it means that a payment you've authorized is about to be deducted.
4. What is the meaning of ACH withdrawal?
An Automated Clearing House, or ACH, withdrawal on a checking account is an electronic money transfer, authorizing a merchant to be paid for products or services, according to the U.S. Consumer Financial Protection Bureau. ACH charges are often used when paying bills directly from a bank account.
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