The Credit Card Processing/ACH Bundle
Accepting credit cards has become the standard in payment processing. However in some industries it may be difficult to obtain a merchant account or a merchant account with a high enough volume cap to satisfy a business’ billing needs. Depending on your business type and client base, not all of your customers may have access to credit cards or debit cards and may be limited to just a checking or savings account. Choice Merchant Solutions has come up with a bundle including both credit card processing and an ACH solution to help.
What is ACH?
ACH stands for “Automated Clearing House” and it is an electronic network for payments that works by processing a large volume of credit and debits in batches. Transfers that use ACH include payroll, direct deposit and vendor payments. Funds are either sent to or taken from the customer’s bank account when an account number and routing number have been provided previously. For more information on ACH payments and standards, please visit http://www.nacha.org, the National Automated Clearing House Association.
In a 2013 study by the Federal Reserve, the findings show that ACH has risen in parallels with debit and credit card transactions, while paper check payments have declined from $36 billion per year to less than $20 billion per year.
Why Use Credit Card Processing and ACH?
The terrorist attacks of September 11th, 2001 paved the future for ACH payments, as paper checks could not be delivered via mail because of restricted air traffic. For days credit card companies and other businesses went without receiving paper payments, and thus the rise of ACH.
ACH payment processing is a great alternative if you are a business that has had a difficult time getting approved for credit card processing or if you have a high processing rates. On a “high risk” account, credit card transaction rates can reach 7%, while ACH payments are usually somewhere around 4% with a small transaction or per check fee. The same applies for low risk credit card accounts as well. Credit card rates may be around Interchange + 2%, whereas ACH will fall around 1.2% with a small transaction or per check fee.
This gives you, the business owner, the ability to push or pull money from your customer’s bank accounts for a fraction of the cost. It also allows you to bill customers who may not have access to a credit card.
You can create a great balance between credit card transactions and ACH transactions to help save your business money and appeal to a variety of customers. After all, having a broad range of payment types to compliment credit card processing appeals to customers because of the convenience of not having to present cash, a check or a credit card to pay.
What Businesses Could Benefit From ACH Payments?
In B2B sales, ACH can be seen as a cash flow accelerator. For example, let’s say a wholesale auto parts dealer is selling Louis’ Brake Shop a shipment of brakes and rotors. With an ACH payment solution, the wholesaler can credit Louis’ Brake Shop for the products once they have arrived instead of waiting for a check or other payment method. This way the wholesaler does not waste time following up on debts and the customer can take advantage of any billing terms that may be applicable to them, i.e. 10 net 30, or something similar. The cost for this type of transaction is also much more manageable for the wholesaler as well.
In B2C sales, ACH is very convenient for recurring monthly services or for regular customers who shop with a merchant frequently.
Businesses that could benefit from ACH payments include but are not limited to the following:
- Condo Associations
- Property Management Services
- Payday Loans
- Debt Collection
- Legal Services
- In House Finance Teams
- Travel Businesses
- Virtual Terminal Offices
From a business perspective, Choice has relationships with major banks and routinely boards merchants ranging from low risk to high risk. All merchants are properly coded with both SIC and MCC codes, ensuring that our clients will never be terminated for being placed in the wrong business sector.
Our clients’ accounts are managed by high risk professionals. We don’t just “set it and forget it”, but rather watch your MID and provide helpful feedback regarding your account when we see growth potential. We also monitor for chargebacks, so if your account’s chargeback ratio increases, we can inform you and take corrective measures before the account can be terminated.
In a world filled with data, Choice knows how important it is to have access to statistics and analytics. Our experts will gladly share such information regarding your account that has been collected though our peer to peer data intelligence system.
All of our payment solutions also allow for seamless integration with any gateway or CRM system, making processing a snap. Whether you’re working from a laptop, mobile device or a card swipe, Choice can help your business succeed. Want to learn more about what we do? Click here!