What You Need To Know
As a business owner, receiving payment for the services or products you offer is an important part of your business. You want it to be easy, secure and convenient for all your customers.
$144 billion noncash transactions were made in 2016. A number that has only grown since. With more and more transactions happening online, having a reliable merchant account that has multiple options of accepting payment is a must for your business to compete.
Benefits of ACH Payments
ACH payments, also known as “direct payments”, eliminate the need for your clients or customers to use credit cards, checks, wire transfers or cash by transferring payment from one bank to another. Every year, 24 billion electronic payment transactions are made through ACH alone.
Most of your customers are probably familiar with ACH payments, even if they don’t know it by name. ACH payments are also faster and more cost-efficient to process than processing other types of payments. It’s also an option available to the 24 % of Americans who do not have credit cards.
Industries can utilize ACH payments differently. Here are some industry-specific reasons to use ACH payments:
- Nutraceuticals – The nutraceutical industry creates over 700,000 jobs in the US and 121.6 billion dollars to the US industry. The lack of federal regulation, as well as higher risks of chargeback disputes, makes it a potential risk for payment processors. The result often is higher fees on payments.That’s where ACH payments come in. As a cheaper and often more secure alternative, high-risk merchant accounts, like those for nutraceutical companies, can process payments more cost-effectively.
- Travel Websites or Online Travel Agencies – By nature of their business and the location of their clients, travel websites receive payments in various currencies from all over the world. Due to booking months ahead of travel times, changes in customer plans puts this industry at a higher risk of chargebacks, or return of funds to a consumer. A bigger challenge is the occurrence of fraud in the online travel industry, which is expected to cost the industry 21 billion dollars. This is why the travel industry is considered high risk and is subject to additional fees that cut into profits. ACH payments provide an alternative to credit cards and allow for travel websites to receive payments in a timely and secure matter.
- Financial Lenders & Payday Lenders – Financial lenders and payday lenders need a way to receive payment on their loans as well as send funds to borrowers. Prior to electronic payments, transactions made by lenders were processed through money orders or checks, which required more time.
Lenders can verify that the one taking out a loan has a bank account by using ACH payments, since lenders utilizing ACH payments require account verifications in order to set up this type of processing. They can also take a look at their banking history to see if they have a record of unpaid ACH transactions. Both of these benefits make ACH payments a more attractive option for financial and payroll lenders who want to collect on their loans.
- Online Education “How To” Courses – One of the benefits of ACH payments is the ability of the customer to set up recurring payments. Once the customer sets up their ACH payments they can choose to set it and forget it or choose to trigger payments manually.
This feature is a great option for online educators who offer a variety of courses as well as for customers who are looking for ongoing e-learning options, an industry that will grow to $325 billion by 2025
If you find yourself in any of the above categories, it may be time to take a closer look at your current merchant account. Is your payment processing service providing you the most cost-efficient, trustworthy and quality service that your business needs?
Click here to schedule a complimentary call with our team, where we’ll take a look at your existing account and help you determine the best merchant account solution to meet your needs.
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