5 Advantages of ACH Payments


ACH payments are a type of electronic bank transaction performed through a network called an Automated Clearing House (ACH). The ACH network is a group of computer systems communicating with each other to make and receive payments. Every transaction involves two computers – one that transmits a payment request and another that gets the request at the other end. Numerous businesses use ACH payments for various functions like bill payments, wage distribution, mortgage payments, and direct deposits. Electronic payments made through the ACH network must comply with the guidelines set by NACHA (National Automated Clearing House Association).

ACH has become one of the largest, safest, and most efficient systems in the world of banking over the past forty years. The network currently manages around $43 trillion worth of transactions every year. Several businesses prefer ACH transactions over other options as they are cost-effective and quick. However, some companies need to know more about ACH payments and how it works, while others need to be aware of ACH payments.

If you know about ACH payments but aren’t sure why you should opt for them, then this guide is for you. This article will tell you about the advantages of ACH payments and why using it could be the better choice for your business. 

Advantages of ACH Payments

As mentioned above, ACH payments are safer, more cost-effective, and more convenient than traditional money transfer methods like cheques. Here are some of the key benefits of accepting ACH payments.

1.Lower costs

ACH payments attract lower costs as they have low transaction fees than credit cards, cheques, and debit cards. Debit and credit cards cost the most as, in most cases; they carry a fee, which is calculated as a percentage of the transaction. Although cheques have the lowest transaction costs, they can cost you more in time and effort. In comparison, ACH payments are the least expensive payment method for merchants. When you add up all your transactions, the cost reduction due to ACH payments can significantly affect your processing fees.

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Paper cheques continue to be the most fraud-prone method even today. There are several ways a cheque could be compromised or defrauded, and it can be lost in transit or forged. However, ACH payments are much more secure than paper cheques because they can’t be lost in transit or defrauded. ACH cuts out all intermediaries, automatically reducing the chances of fraud and tampering. Hence it offers greater security and safety to doing business.


ACH payments are more convenient for you and your customers as neither has to carry the chequebooks around. You can also choose to make a one-off payment on set-up direct debit. Furthermore, you don’t have to visit the bank branch physically, and you can do everything from the comfort of your home within a few minutes.

4.Recurring billing

If you operate on a subscription-based model, then ACH payment is the best option for you and your customers. A business that bills its customers regularly faces many challenges, like high processing costs due to the high volume of transactions. If the customers forget to pay the bill, the unpaid invoices can lead to cash flow problems, and ACH payments can eliminate all such issues.

5.Faster processing

Unlike a paper cheque that takes two or more days to clear, an ACH payment is paid online and almost instantaneously, cutting down processing time drastically. ACH payments are also given preference over paper cheques which mean that they will be processed before cheques. In short, ACH payments ensure you’ll get your funds faster than a traditional cheque.

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Check out our guides here if you need more information on ACH payments.


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