ACH Processors – No Two Are Alike

Businesses looking to provide convenience and flexibility to their customers are offering a fuller range of payment options. Accepting checks, credit cards, debit cards and even ACH payments has increased the potential customer base of many businesses. If you are looking to increase your customer base by adding ACH payment acceptance, then you have many different ACH processors to choose from. An ACH processor makes it possible for you to receive payments from your customers for goods and services via ACH or automatic clearing house. An ACH payment allows money to be transferred securely from your customer’s bank account to your own, instantly.

There are many ACH processors out there, but not all processors are equal. An ACH processor provides you with a means of communicating with the Federal Reserve and Electronic Payments network. Your processor passes your request for a transfer on to the Fed, which then routes it to the appropriate bank. That bank then initiates a wire transfer of funds from your customer’s bank account, back through the Fed and into your bank account. Without the ACH processor, none of this would be possible. Different ACH processors can offer different rates, based upon the banking relationships that they have, so it is important to shop around.

Many ACH processors can also offer other types of payment processing as well. Credit and debit card acceptance are very common payment services for any processor to provide. Although the network through which an ACH payment will process is different, the equipment is sometimes the same as is used for credit card processing and the timeframe is similar. The big difference is that all credit card transactions must pass through what is known as interchange, which is essentially the act of being presented to VISA and MasterCard. As the transactions are received by the associations (VISA and MasterCard) they are then passed onto the issuing bank of the cardholder. ACH payments happen entirely outside of interchange.

Shopping for ACH processors is a very important step to take when deciding how your business will receive funds from your customers. You need a processor that has a reliable network, strong customer support, and a good reputation for information security. All ACH transactions involve personal financial information and therefore need to be closely guarded. You want and need a processor that can keep both your information and the information of your customers very safe.