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How do ACH/eCheck Payments Work?

We’ve all used paper-based checks to send and receive money. ACH payments work the same way, complete with user-submitted account numbers and bank routing numbers. The main difference, however, is that all payments happen electronically over the Automated Clearing House (ACH) Network.

Both senders and receivers enjoy certain benefits when they trade funds electronically, including: 

  • Faster authorizations. You don’t have to mail ACH payments. All transactions happen digitally over a secure network.
  • Simplified reporting. Because transactions are electronic, you can integrate ACH payments directly into your accounting and CRM software. 
  • Greener invoicing. ACH payments consume zero material resources like paper, ink or postage.

Arguably, though, the biggest benefit is cost.

When you factor in employee hours, material expenses, delays and lost payments, businesses often spend between $4 and $20 processing every single paper-based check that enters their system.

By contrast, ACH payments can remove all of these hidden costs, allowing you to keep a much larger percentage of every successful sale: 

  • No more employee hours wasted on handling individual checks.
  • No more unnecessary trips to the bank.
  • No more manual bookkeeping or data entry.

These savings partially explain why the ACH Network processes $41.6 trillion annually. That volume will only grow as businesses continue to phase out paper-based checks.

What are Some of the Different Applications for ACH Payments?

Although the ACH Network is often presented as an alternative to checks, it’s really a full-featured payment platform that can handle a wide variety of business needs.

Many companies use ACH payments for payroll (i.e., direct deposit). Though you can also configure the system to work with:

  • E-commerce sales
  • Nonprofit donations
  • B2B and B2G transactions

In fact, ACH processing can work for any merchant in any industry, but it’s important that you set up your payment environment the right way. 

That’s where we can help.

BluePay’s Approach to ACH Transaction Processing

Most payment providers offer at least some type of ACH support. What makes BluePay’s Automated Clearing House payment processing solutions unique? 

For starters, our BlueChex ACH system was designed with payment security in mind.

All transactions that pass through BlueChex comply with the latest guidelines established by the National Automated Clearing House Association (NACHA) — the nonprofit organization that manages the ACH Network.

In addition, BluePay’s ACH processing solutions come with unparalleled flexibility, allowing you to send and receive money however you choose: 

  • You can opt to initiate transactions directly through BluePay’s financial institution. 
  • You can also choose to initiate payments through some of the biggest banks in the industry, including PNC, U.S. Bank, Wells Fargo, Chase, Bank of America, ACB Bank, Capital One and MB Financial.

Either way, you still benefit from unparalleled fraud protection to ensure that your payment data remains safe from prying eyes.

To learn more about BluePay’s ACH payment processing solutions, contact our merchant services team today for a free consultation.

Topics: ACH/eCheck Payments, E-Commerce and Online Payments, Payment Technology, Getting Started with Payments

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