ACH Processing Ins and Outs

ACH Processing Ins and Outs

ACH stands for Automated Clearing House, a network managed by NACHA. The network enables the electronic transfer of funds from one bank to another by directly debiting a checking or savings account. It is commonly used for payroll, bills, tax payments and consumer or business-to-business (B2B) transactions.

Many struggle to understand how ACH works and how to handle rejects. Let’s dive right in.

Processing ACH

To process consumer or B2B transactions, you simply enter the customer's routing and account numbers and run the transaction. From there, the customer's account is debited and your business receives its funds the next day.

With our Virtual Terminal you have the option to collect a signature for both in-person and remote ACH payments. Plus, a receipt can be emailed or printed if the customer wishes. (Pretty nifty, right?)

Although you need to key in the account information, once it’s entered, it’s saved. So the next time your customer wants to make a purchase, all you have to do is simply pull up her information and charge the account with one click. An added bonus? You can set up automatic, recurring payments with these accounts on file.

Similar to a bounced check, these transactions can reject. There are a few reasons why.

ACH Rejects and Notifications of Change (NOCs)

The network provides status codes when an ACH transaction is rejected. A reject can occur for a number of reasons. For example, the bank account may be frozen or lack sufficient funds to cover the transaction.

There are a few ways to handle rejects and, depending on the reason, some transactions may be corrected and resubmitted immediately. If payments are unsuccessful, you are notified within two to four business days of the transaction (much quicker than the five to 10 days it takes with paper checks).

Some reject codes are NOCs, which shouldn’t be taken lightly. A NOC means there was a change regarding the bank account you are trying to debit. Most Merchant Account Providers charge a fee for every NOC you encounter. Meaning, if you fail to update the information, on perhaps a recurring payment, you’ll incur a fee every time the transaction is attempted.

With PayJunction, you’re only charged a NOC fee once. Any future payments for that account do not incur a fee even if it still hasn’t been updated.

Reap the Benefits

Give the option to pay with ACH and never worry about getting repeatedly hit with NOC fees. Opting for ACH also means paying lower transaction fees versus credit card transactions. So when it comes to accepting large payments, you can have a strategy to use ACH when applicable. Begin to accept ACH with PayJunction and see the benefits (like lower transaction fees!) unfold. It’ll mean a lot for your business and your customers.

See everything the Virtual Terminal has to offer.

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Sick of paper checks? Do you think ACH could benefit your business and streamline your workflow? Tell us what you’re thinking below!

About Ursula Librizzi

Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks, contributes content and bridges the gap between the sales and marketing departments.

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