Merchant Account Payment Gatways

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What is ACH Payment Processing?

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Though you may never have heard of the Automated Clearing House (ACH) Network, in all likelihood you have availed yourself of its services. For instance, have you ever paid a bill online, made a bank transfer, used Direct Deposit, or sent an Electronic Cheque? If so, you have used ACH payment processing .

And you are not alone. In 2007, over eight billion consumer bills were collected via ACH. This is a growth rate of nearly forty per cent over the previous year. But what exactly is ACH? The Automated Clearing House Network is an extremely effective, efficient and reliable way to transfer electronic funds and payments for participating financial institutions. The reason that this service is popular with consumers is because it saves them time and money. For example, let’s say your credit card bill is due tomorrow and you have neglected to send in the cheque. Well, if you use ACH payment processing, which is also known as online bill pay, you can get the payment in on time and save yourself the ten or twenty pounds late fee.

Of course, ACH payment processing also provides many benefits for banks and financial institutions. The first and most important advantage is of course a financial one, since paper transactions not only take more time, but they are also more expensive. For instance, did you know that it costs nearly a pound to process the average paper cheque? By comparison, an ACH payment can be completed for less than half that amount.

But in the end, both the financial institution and the customer wins with ACH payment processing. The bank gets a break on cheque processing fees, while the customer is afforded the added convenience of paying his monthly bills online or having his paycheque directly deposited into his account.