There are many advantages for using electronic payments for checks instead of using paper checks. When a transaction completes more quickly, cash flow improves because that cash can be used to reinvest back into the business much sooner. It can be used to purchase more inventory, take advantage of cash discounts on purchases, and expand into profitable opportunities. Waiting for a paper check to clear, takes an extraordinary amount of time in comparison to the quickness of an Automated Clearing House (ACH) transaction.


Overdraft Checks Are Avoided

ACH transactions only work with funds available. If there are not sufficient funds in the account, the transaction will not go through. When checks are processed electronically, merchants do not have to wonder if the check will be paid properly or if it will be returned from the bank as “insufficient funds.” Customers who pay by electronic check also know that the transaction is sound and the funds are available to make the payment when they make it.


Regular Recurring Payments Are Made Easily and On Time

Setting up regular payments on a schedule in advance assures that the payments will be made when due. This takes away all the concern of missing a payment and eliminates the possibility of owing late fees. Employers and employees benefit when employee payroll payments are made by direct deposit. An ACH transaction for payroll is less than 20 cents per person, on average, for the preparation costs.


ACH Processing Fees are Lower

The transaction fees for an ACH transaction are the lowest fees for any kind of transaction. They are much less than credit card processing fees and paper checks.


Time Savings

No only is the time spent preparing paper checks no longer necessary, with ACH transactions there are fewer data entries to make, fewer trips to the bank, and the process of account reconciliation at the end of the month is improved.


ACH Transactions are Paid First

Banks recognize an ACH transaction as having priority over other forms. Banks want to honor the ACH transaction quickly and efficiently. If the same account that has an ACH transaction going through also has a paper check going through at the same time, the ACH transaction will be processed first.


ACH Transaction Disputes are Limited

There are only three reasons an ACH transaction can be disputed. They are: 1) the transaction was for an incorrect amount; 2) the transaction was presented earlier than when due, and; 3) the transaction was not authorized. Unlike credit card transactions, which can be disputed for a variety of reasons, an ACH transaction is much more solid.


ACH Transactions are Secure

The bank account information of the customer is already printed on their paper checks. When they hand a written check to somebody to pay for something, they are giving out their bank account number to anyone that can physically see that check on its way to being processed at the bank. ACH transactions only expose the customer’s bank account through a secure system to make the payment and nobody else gets to see the account number.


ACH Transactions are Environmentally Sound

Electronic transactions save considerable amounts of wasted paper and that paper comes from trees. Trees absorb carbon dioxide from the atmosphere, which helps reduce the impact of human pollution on global climate change. Rather than write and receive paper checks it is better to “go green” with ACH transactions.


There are many benefits of using the ACH system to make and receive payments. The ClearPay staff is the expert businesses need to set up systems in order to enjoy all the advantages of ACH transactions. Contact ClearPay today for a free assessment about how electronic processing of checks and ACH transactions can improve your business.