According to a 2015 Perceptions Study: Research and analysis of supplier activity in the areas of invoicing, payment and remittance, and credit collections, it was found that 83% of the respondents receive payments from their customers by paper checks, while 73% receive them through ACH (Automated Clearing House), and 52% receive them through credit cards. When the respondents further questioned them as to which method they would prefer for making payments the most, 63% of them chose ACH, 25% preferred paper checks, and 9% decided to go with credit card payments. The study certainly makes us feel that there’s huge potential for ACH to be the dominant payment gateway in the near future.
So, if you’re planning to buy an ACH mailing list for your ACH marketing campaign, you’re on the right track.
ACH payments were introduced in 1970 and were a substitute for check payments. The transactions are completed much faster and the processing fee is comparatively lower than credit card payments. This is what makes it preferable. Plus, the acceptance of ACH payments is easier to set up with a company’s financial institution. The improved standards and acceptance has made ACH payment techniques widely popular and omnipresent.
To ensure that this mechanism becomes universal, NACHA, the Electronic Payments Association, plays an important role. It brings about rules and standards, like ISO 20022, as an international standard for financial service messaging and business works. To learn more about NACHA, visit their website, www.nacha.org.
Here are the top reasons why those 63% preferred ACH payments:
• Quick and affordable (usually cleared in 3 days)
• Faster and easier, as you do not need to check the mail and then deposit your money
• Quick availability of funds
• Higher efficiency from a cash flow perspective
• Better records of remits
• Less chance of lost payments
ACH payments are the perfect choice for organizations who wish to procure quick payments with lower fees and DSO. Plus there is the advantage of early payment discounts.
When you sell your merchant cash advance from your ACH mailing list, most of the lenders require such loans to be repaid daily, or once a week or month. ACH payments are highly preferred by them for payment, and only a few give the option of paper checks every month.
When you are offering an online small-business loan, you will not only look at how often you would want to be repaid, but also how you will expect your client to pay you. Such factors affect the cash flow of the business, and if not taken care of, they may result in additional fees.
The borrowers are aware of the fact that most of their payments will be made automatically by deducting the amount from their bank account under the Automated Clearing House service. In fact, 90% of the payments in the US are made using this technique.
Along with the above benefits, no processing fee is charged for direct payments. All your borrowers have to do is provide the account and routing number from the bank. Any withdrawals they need to make should be kept stress free for them, so they do not need to set up payment reminders. They will also be free from late fees or missed payments. E-checks reduce the chance of fraud, as there are a lesser number of people handling the transaction.
Borrowers should keep their monthly statements updated to ensure that the correct amount is being withdrawn from their account. They also need to be ensured that there is enough cash in the account to cover the loan amount so that they do not have to face an overdraft fee.
Therefore, when you start targeting the businesses from your ACH mailing list, more and more businesses will be interested in getting a loan from you in the light of the benefits associated with ACH transactions.