Is remembering to send your mortgage payment or car payment on time a challenge every month? Do you find yourself paying late even though you have the funds in your account? Such actions can wreak havoc with your credit score. Using ACH payments can help avoid late payments and the associated fees by debiting your account automatically for recurring payments.
What are ACH payments?
ACH stands for Automated Clearing House. ACH payments are payments that are electronically deducted every month on a given date from a consumer's bank account. These payments are generally used for fixed recurring debits, such as mortgage payments, car payments, insurance payments, payments to the IRS, or payments on an installment loan. When combined with direct deposit of your paycheck, such payments remove a lot of the hassle associated with paying your bills each month.
What advantages do ACH payments offer consumers?
Automated payments offer consumers a number of advantages. These include:
- Convenience. With an automated payment, you don't have to worry about writing a check, finding a stamp, and getting it into the mail on time. If you travel on business frequently, you also have peace of mind, knowing that your bills are being paid even when you're away from home.
- Safety. With an ACH payment, you can see immediately that your payment was received, unlike a mailed payment. Plus, there's no chance that your check is lost or stolen en route.
- Speed. Your payment arrives more quickly with an ACH payment than if you mail a check.
- Savings. Some companies, such as insurance companies, offer a discount to consumers who opt to pay their premiums via an ACH payment. In addition, with automated payments, you save by not having to purchase so many paper checks and stamps.
- Reduced errors. With an automated payment, you don't run the risk of forgetting to sign your check or entering the wrong amount. Once you set up your payment, the same amount is deducted each month.
More bank transactions are completed by ACH payments each year than by paper checks, and the number of such payments is growing steadily. As a business owner, accepting ACH payments makes it convenient for your customers to pay for goods and services, which helps improve your cash flow and boost profitability.
Want to learn more about accepting ACH payments at your business? Ask us how you can get started today!