ACH stands for automated clearinghouse. In
laymen terminology it’s an electronic network for handling electronic banking transactions.
Quite simply, any entity whether a business government entity, organization, or individual
can utilize the ach network to electronically send or receive funds through. Ach transactions
operate differently than credit cards. Credit cards have an authorization component that
let’s the biller know in real time that the payment is good. The Ach world operates in
a batch environment and it can be 24 -72 hours before an issue or payment is known. There
is also a major difference in cost. Credit cards may cost a business 2-3% of the transaction
amount, whereby ACH is typically a flat 25-50 cent fee, this can add up. Coupled with much
higher decline rates with credit cards ach payment are a great option for recurring billing.
Subscription based businesses are huge beneficiaries of participating in the ach network. Today’s
tool set up allows them to connect directly with an ach processor via api and automate
the entire process for recurring receivable transactions, never having to wonder about
payments showing up on time. For more information visit agilepayments.com n for What is an ACH