In today’s market, operating without accepting debit or credit cards has become virtually impossible for merchants. Businesses need to find a reliable payment processor in order to accept the ‘plastic’. While finding such a merchant account provider is easier for most businesses, those that are labeled high-risk have to face several challenges and for them, getting approved for a processing account can be very frustrating. Fortunately, high-risk businesses have a suitable option for high risk ach. ACH processing. In fact, the many changes to ACH transactions over the years have made them an ideal option for these businesses.
What Are High Risk ACH Transactions?
ACH stands for Automated Clearing House. It is an electronic system that has been designed to allow businesses and consumers to both send and receive funds by performing bank-to-bank transactions. ACH transactions are governed and regulated by the National Automated Clearing House Association (NACHA). NACHA is one of the biggest banking systems in the world, processing billions of ACH transactions every year.
ACH payments are used to pay bills online, have your health insurance company send money to your doctor, send your kids money on Venmo, or receive your paycheck via direct deposit. ACH payments are fast and efficient since they electronically transfer funds from bank to bank. Because of this, ACH eliminates the manual task of printing or writing a check, mailing it, and then depositing it into your bank account.
How Do High Risk ACH Payments Work?
There are two primary ways ACH payments work: push and pull:
- An ACH push occurs when the account holder initiates the fund transfer. In this scenario, the business or person makes the purchase. Account holder pushes the funds from their bank account to the payment processing system or bank of the business. ACH push payments are also commonly known as ACH credit payments.
- An ACH pull occurs when a business or person receiving the funds initiates the fund transfer. A good example of ACH pull is the automatic billing for monthly subscriptions or deliveries. Each month on a specified date, funds from the consumer’s account are automatically pulled via an ACH pull transaction. These payments are also commonly known as ACH debit transactions.
How Do High Risk ACH Payments Compare to Other Transaction Methods?
Currently, ACH payments account for about 30% of all the transactions. Check is still one of the most popular ways to pay invoices. The problem with mailing checks is that it is a relatively slower process which sometimes takes up to a week in order to receive the check. This makes it quite difficult to estimate a budget for your business. The system for mailing and processing checks also leaves businesses open to cyber hacking and fraud, hence increasing risk. Not to mention check processing also makes the operations of a business more difficult.
While some businesses prefer to choose this time-consuming process as they want to keep proper records of any sales or expenses, many companies use credit cards to … Read More..