There’s so many payment terms out there, you’d be forgiven for not knowing exactly what ACH is, or why it’s such a great way to get customer payments.
Offering ACH is actually quite simple: it’s a seamless, safe and easy way to transfer money from your customer’s bank account to yours.
But why accept it – and why will your customers love you for doing so?
- It’s cheap. ACH was created by banks to transfer money inexpensively between each other – there’s no third parties. That’s why ACH transfers tend to be so much cheaper than credit card transactions, which can have charges of 4% or more of what you’re collecting! (One of the reasons Finli is so affordable is because we use ACH to power our payments). In fact, most other countries have a much lower credit card usage because of that. Japan, for instance, only uses credit cards for 17% of their purchases. The US is moving towards that trend with ACH payment volume increasing to over 50% in the last 10 years.
- E-payments are here to stay. COVID has accelerated the adoption of e-payments, with 70% of people now preferring to make a digital payment. However, many of the apps they’re familiar with (like Venmo and Paypal) offer person-to-person (P2P), not person-to-business transfers. Accepting these payments for your business seems easy, but can lead to headaches down the road. For instance, P2P options don’t offer invoicing or record-keeping, making keeping track of who paid and filing taxes at the end of the year, difficult.
If you don’t accept e-payments, or if your clients are paying you with a P2P app, it might be time to find a software (like Finli) that is built specifically for e-payments to education-based businesses.
- Get paid (the bottom line). ACH offers great tools to ensure you get paid on time, every time. You don’t need to rely on someone handing you payment when they come to your physical location (especially hard for online classes!). In fact, ACH payments are perfectly set up to allow for recurring, automatic payments. This is a great feature that customers love because they don’t need to worry about due dates or late fees.
Recurring payments are also possible with credit cards (and we do offer that), but consumers change their credit cards frequently, and credit cards expire often (3 – 7% of your clients’ credit cards expire each month) so it can be a pain to get them updated.
We hope this overview has been informative, and has helped you understand why we’re so excited to share the importance of ACH for small businesses!
Click here to learn about Finli, and see how you can start accepting ACH today!