How To Set Up ACH Payments For Your Business

ACH payments offer businesses a low-cost way to accept bank-to-bank payments, including recurring payments and invoices.

This guide explains how to set up ACH payments, what information you’ll need from customers, and how to start accepting them through your bank or payment provider.

How To Set Up ACH Payments

You can accept ACH payments through your bank, accounting or invoicing software, or a third-party payment processor. Start by checking whether your current provider already supports ACH and comparing its fees, funding times, limits, and return policies.

You’ll generally need the following:

• Business Bank Account:  You’ll need a bank account where ACH payments can be deposited.
• ACH Payment Provider: Your bank or payment processor submits the transaction through the ACH Network. For online payments, the provider may also supply a checkout form, payment link, virtual terminal, or invoicing tools.
• Customer Bank Information: For an ACH debit, you’ll typically collect the customer’s name, bank account number, routing number, and account type. Many providers offer instant bank verification or microdeposits to verify the account.
• Customer Authorization: You must obtain the customer’s permission before initiating an ACH debit. The authorization should clearly state the payment amount or method for determining it, whether the payment is one-time or recurring, and how the customer can revoke authorization. Requirements vary depending on whether authorization is collected online, by phone, or in writing.

Customers can also initiate an ACH credit through their own bank. In that case, you provide your business banking or payment instructions, and the customer sends the payment rather than authorizing you to withdraw it.

Using your existing bank or payment processor may be the simplest option, but compare the total costs and features with other ACH providers before signing up.

How To Start Accepting ACH Payments

Follow these steps to add ACH as a payment option.

Step 1: Pick A Provider

Start by checking whether your bank, payment processor, invoicing software, or accounting platform already supports ACH.

Compare:

• Transaction and monthly fees
• Funding times
• Payment and account limits
• Returned-payment fees
• Recurring billing tools
• Bank-account verification methods

Step 2: Set Up ACH Processing

Apply for ACH processing through your chosen provider. Approval requirements and setup times vary, and ACH may require separate underwriting even if you already accept credit cards.

Connect the business bank account where you want payments deposited and complete any required account verification steps.

Step 3: Choose How Customers Will Pay

ACH payments can work in two ways:

• ACH debit: The customer authorizes your business to withdraw payment from their bank account.
• ACH credit: The customer sends payment through their bank or bill-pay service.

ACH debits are often easier to automate for invoices and recurring payments, while ACH credits give customers more control over when payment is sent.

Step 4: Collect Authorization Or Share Payment Instructions

For ACH debits, collect the customer’s bank details through a secure payment form and obtain authorization before initiating the transaction. Online consumer debits may also require bank-account validation.

For ACH credits, provide secure payment instructions through your invoice, payment portal, or bill-pay system. Avoid sending sensitive bank information through unsecured email.

Step 5: Let Customers Know ACH Is Available

Add ACH to your invoices, payment links, recurring billing forms, or online checkout. Briefly explain when it may be useful, such as for recurring bills, B2B invoices, and large payments.

Once enabled, monitor pending payments and returns through your provider’s dashboard and reconcile deposits with your accounting records.

How To Get Your Customers To Pay By ACH

To encourage customers to use ACH payments:

• Introduce ACH as a preferred payment method during customer onboarding
• Add ACH instructions to invoices, payment pages, and account communications
• Explain that ACH can simplify recurring payments and reduce reliance on paper checks
• Make enrollment easy with a secure payment form or bank-linking option
• Focus first on repeat customers, large invoices, recurring payments, and accounts that frequently pay late
• Remind customers periodically that ACH is available
• Consider offering a small discount or one-time incentive
• Offer another payment method for customers who cannot or do not want to use ACH

Avoid claiming that ACH is always faster, safer, or less susceptible to fraud. The benefits depend on how the payment is initiated, the provider used, and the customer’s current payment method.

The Bottom Line On ACH Payments

ACH payments give businesses a lower-cost way to accept bank payments for invoices, recurring bills, and other transactions. They can be a useful addition to your payment options, but processing times, returns, fees, and customer preferences should all factor into your decision.

Compare the best ACH payment processors to find a provider that fits your business’s payment volume, budget, and billing needs.

FAQs: Setting Up ACH Payments