Increased security
ACH payments go from one bank account to another, which does not have the potential for chargebacks and minimizes fraud, as opposed to payments made using paper checks or credit cards.
Lower processing costs
ACH payments cost on average $0.15-$2.00 per transaction, which is lower than all other forms of payment ($1-20 for paper checks up to 3% for credit card). If a company decides to pass through the processing fee to the customer, ACH can minimize the fee amount.
Convenience
There is no need to spend time and resources sending a check or working with a credit card company to make the payment, as ACH payments are sent directly from one bank account to the other.
Fewer resources
As electronic payments, fewer resources are required to write and mail checks, in addition to postage, paper check, ink, and envelope costs.
Faster processing times
Online payments get processed much quicker than paper checks and can ensure on-time payments and payment on the day the customer wants to pay.
Fewer reasons for disputing charges
ACH payments can only be disputed for 3 reasons:
- Inaccurate amount authorized.
- Processed earlier than the authorized date.
- Payment not authorized at all.
No expiration date
Unlike credit cards, bank accounts do not have expiration dates, and therefore ACH information does not have to be updated on a periodic basis, which ensures continuous payments and minimal manual effort.