Some of you may be shocked to know exactly how many hard working Americans still use paper checks as a payment method, and even more, businesses that only accept paper checks. I know! Times are flying and technology has snagged us all by the the fake pockets of our jeggings. We may not have a Marty McFly hover board, but we do have technology more advanced than that of the first space shuttle, literally in the palm of our hands. We can talk to our watches and get directions. We can feed our pets via web cam. An entire library of books and music fits on a tiny chip smaller than a Cheerio. Our cars can park themselves. Let me just say that again. Our cars can park themselves. We have all of this insane technology the sci-fi world has been dreaming of for generations and people are stuck on paper checks. And believe it or not, some people like it that way. What the ACH?
Exactly. So what is ACH and what does it have to do with your business? ACH (stands for automated clearing house) allows businesses to electronically accept customer payments directly from the customers’ bank accounts by using the account and routing numbers. Most people have used this method when paying their utility bills. ACH payments are basically E-checks.
I get it! In several lights, checks are the most logical way to go. They’re easy to track and cancel, also very specific on who can cash and deposit them. If you’re mailing a payment, a check is definitely a better option than mailing cash. Unless, of course it’s a $2 bill in a birthday card from nana. Yeah, they still make those too.
But what if you are operating the type of business that has customers paying bills? Lawyers, accountants, architects, landscapers, or contractors for example could all HUGELY benefit from ACH. How does this affect your business? How can you use ACH to improve what you have already? I’m glad you asked.
Benefits For The Customer
As each generation comes into the adult world of responsible bill pay and credit build up, it gets a little bit simpler, and a little bit more convenient. My father used to spend an entire day driving around town just paying bills. He always made sure to let mom know he had the checkbook. These days? My mom spends 15 minutes on the computer, pays every bill, and can continue on with her trying game of Majong. My kids will never know the struggle of checkbook marathons due to ACH. ACH is also a better organizational tool for customers as they are able to see the business name and amount paid on their statements instead of searching for check images.
Benefits For The Business
There are several highlights to using electronic checks vs paper checks for businesses. For one, your check will not be lost in the mail, and it will not be delayed or stolen. There’s no delay on payment, no one has to wait. If a customer forgets to pay the bill until the day of – not a problem anymore. One of the largest draws for businesses is the cost. According to System Six, a bookkeeping and analysis firm companies are paying an average of 3.0% in fees when using credit card payments when they could be paying closer to .20% with ACH. Not to say that they shouldn’t provide both options, but think how much can be saved as customers opt to pay via ACH.
Megan Flanagan has been in the customer service business for over ten years hand in hand with several companies, large and local. She is a native of Syracuse New York where she lives with her fiancé, step daughter, and new addition, baby Eloise. New to the business blogging world, she has always had a passion for writing, communications, and the art of entertainment.
Top photo courtesy of Matthew Pearce @ flickr CC.