How To Receive ACH Payments: Background
Let’s start with the background on
How To Receive ACH Payments.
An electronic transaction must be run through an Automated Clearing House (ACH) before any funds might be deposited to an account.
The clearing house performs verification and account processing for funds transfer.
However, a company can’t provide electronic payment services to clients unless ACH processing or another verification method is in place.
For this reason, the Federal Reserve System is utilized to carry out the actual transfer and more banks participate in this communication system to provide electronic services to their clients.
Specific regulations are in place to monitor this form of processing.
This transaction management method provides a beneficial solution for removing the sheer number of work required for written checks.
As an advantage, ACH makes it easy for any company to receive repeating payments or transfer funds.
How ACH Payments Work
ACH payments are typically used include payroll, bill pay, and business expense transfers.
Processing averages between two and 3 days for each electronic payment.
A credit card merchant account is needed to accept any form of electronic payment and setup of such an account will vary depending upon the kind of transactions and also the acceptance method.
Independent brokers or financial institutions can provide this service for companies.
An account makes it feasible to accept credit, debit, and ACH payments.
typically tied to the business name as well as tax ID number.
Applying For ACH
Anyone owning one or more business will need to apply for separate accounts.
Equipment can, however, run transactions for one or more account.
A company can have multiple credit card merchant accounts and still run the transactions through a single piece of equipment so long as the purchased gateway will support this capability.
Obtaining an account is the initial step any business must take to accept or perform ACH transactions.
A company submits an application to the selected provider.
Access to the terminal or gateway is provided upon approval of the application.
Gateways are designed to accept data pertaining to the sale like the purchase total, card info, and voided payment information.
ACH Receive Payments Online
The account provider relays all required info to a credit card network or clearing house depending upon the kind of transaction.
Credit payments are processed through a specific network while ACH transfers get sent to a clearing house.
Providers offer additional services outside of basic processing.
Offered services vary by provider as well as fees charged for each service.
Authorization must be received by the client to process an ACH transaction.
It can be in the shape of verbal, written, or electronic approval.
An entry is sent to the company financial institution and after that passed to the clients banking facility.
The clearing house performs verification before funds are deposited into the business account.
Many additional steps can be involved with this process before the deposit occurs.
You can now connect FreshBooks to ACH to receive payments online.
Try it Free
This is a basic summary of
How To Receive ACH Payments.
Are you interested to learn more?
➡ Get FREE access to my E-BOOK + TRAINING VIDEO about the best system to earn money online and have your marketing on autopilot from the comfort of your own home:
➡ Did you find this post useful… Would you be interested in an easy and detailed guide on how to make money online?
If you would, or you have questions regarding this post, let me know in comments below.
Questions? Ask in comments >>
Did you like this post/method?… Let me know in comments.