The Lowdown on ACH

An electronic payment network utilized by individuals, businesses, financial institutions, and government organizations, the Automated Clearing House (also known simply as ACH) provides these entities access to payments with better cash management capabilities, as well as lower costs than conventional paper payments. ACH is a nationwide network that exchanges funds and information throughout the United States, as well as Canada and other U.S. territories. More than 98% of the nation’s financial institutions, including savings banks and credit unions participate in the network. 

At present time, there are significant efforts underway for the strategic development of a worldwide ACH Network, known as the Worldwide Automated Transaction Clearing House (W.A.T.C.H). 

How Does the ACH Network Work? 

The ACH network permits for funds to be electronically debited or credited to a company’s or individual’s deposit account – whether that deposit account is a checking, saving, loan, and/or general ledger accounts. ACH transactions consist of basic entry details including the individual name (excluding Point-of-Purchase transactions), financial institution routing number, account number, amount, and effective date for the transaction. Further payment information may be sent in extended record formats, which are referred to as addenda records. These records often include payment-related information such as invoice number and/or shipping advice.

Typical ACH Process

1.)   A company or individual (Receiver) authorizes another company or individual (Originator) to initiate a transaction to their specific financial institution account.

2.)   Originator prepares information abut the transactions that are to be automated for customers or employees and passes it to an Originating Depository Financial Institution (ODFI).

3.)   ODFI collects ACH transactions from participating companies, consolidates the information and presents it to the ACH Operator.

4.)   ACH Operator processes transaction files from the ODFI and distributes it to Receiving Depository Financial Institutions (RDFIs).

5.)   RDFI receives entries for its customer accounts and in turn posts entries on the settlement date. Transactions are also reported on account statements.

ACH for High Risk Merchants

ACH processing is clearly an optimal solution for merchants that have been repeatedly turned down because their business is considered “high risk.” Why? ACH processing rates can be as much as 50% lower than accepting credit and debit cards.

Why Choose ACH Processing? 

Not only is ACH processing a reliable and secure electronic payment system, but it also saves businesses, including high volume merchants, hassle, stress, and time. Businesses have the ability to check their debit/credit and savings accounts electronically with ACH processing, and the simple, secure tools offered through the network make payments much easier.  

In the past ten years alone, there has been a significant increase in the use of ACH processing, as more and more businesses feel comfortable with the network and electronic transactions. The direct debits and direct deposits are ultra convenient and contribute to the overall cash flow for the businesses.

To date, over 12 billion transactions are processed electronically per year around the world with ACH processing.

High Risk Processor is a company that specializes in High Risk Merchant Accounts, High Volume Merchant Accounts and International Merchant Accounts. High Risk Merchant Accounts often include mail orders, telephone orders, adult entertainment industry items, direct marketing transactions, online dating or escort services, outcall services, travel, telecom, timeshares industry transactions, herbal supplements, weight loss programs, magazine subscriptions and membership services, membership clubs, ticket sales, multi-level marketing merchant accounts, bail bonds, gun shops pawn shops and rare coin businesses, water filtration and purification systems, collection agencies, auto rentals, computer sales, custom design products, software and hardware sales, detective services, door to door sales, massage parlors, hair restoration services and  cosmetic surgery facilities, high ticket and high volume merchant accounts, home based businesses, fortune tellers, infomercial merchant accounts, insurance and investment products, custom jewelry designs, phone sales, internet businesses, seminars, schools, sports collectibles, used auto sales, diet centers, vitamin and herbal supplement stores, international merchants, companies facing a high number of chargebacks, etc.