How To Set Up ACH Payments For Your Business

Wondering how to accept ACH payments or how you can encourage customers to pay you via ACH? Our step-by-step ACH guide will help you get started and show you the benefits of this payment method.

WRITTEN & RESEARCHED BY
Kate Hoots
Senior Staff Writer

Last updated onUpdated September 13, 2023

REVIEWED BY

Senior Staff Writer

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How to accept ACH payments

ACH payments are safe, easy, reliable — and usually less expensive than other payment methods. So if your small business is not already accepting ACH payments, it may be time to start.

If you’re new to ACH and want to learn the basics, start with our guide to ACH payments. You’ll learn, for example, that ACH stands for Automated Clearing House, an electronic payment network. It’s run by an organization called Nacha that monitors member banks and credit unions and enforces ACH standards.

Keep reading to learn more about ACH, including how to set up ACH payments, find the best payment processor, and understand ACH fees.

Table of Contents

Should Your Business Accept ACH Payments?
ACH Payment Processing Fees Explained
How To Set Up ACH Payments
How To Start Accepting ACH Payments
How To Get Your Customers To Pay By ACH
Should Your Small Business Accept ACH Payments?
The Bottom Line On ACH Payments
FAQs: Setting Up ACH Payments

Should Your Business Accept ACH Payments?

With a few exceptions, which we’ll cover below, all businesses can benefit from adding ACH as a payment option. Here are some of the top advantages of taking ACH payments instead of credit cards or checks:

Lower Fees — Or None At All: The average cost of processing a credit card payment ranges from 1.5%-3.5% of the transaction. The median cost of sending or receiving an ACH payment is between $0.26-$0.50. That’s also a bargain compared to the median cost of $1.01 or more for receiving a paper check.
No Limits: Many banks allow unlimited incoming ACH payments, with no fees. However, most business bank accounts limit how many paper checks you can deposit, and many accept cash deposits only for a fee or not at all.
Faster Payouts: Although it can take several days for an ACH payment to be processed, once the transaction reaches your bank, the money is yours to access. Wire payments may be faster but also more costly. Funds from paper checks can take many days to hit your account. (Same-day ACH processing is available for a fee.)
Greater Security: A fraud report created by the Association for Financial Professionals and backed by JPMorgan Chase & Co. shows that the risk of fraud is about 30% less with ACH payments than with payments via check.
Customer Convenience: ACH payments are cost-effective, safe, and easy for customers too. Most banks allow fee-free bill payment, which is usually a form of ACH payment. Those payments are less likely to lead to fraud and identity theft.
Fewer Disputes & Faster Settlements: Customers typically have only 90 days to dispute an ACH payment, compared to 120 days for credit cards. The only reasons customers can initiate an ACH reversal or chargeback is if the transaction was never authorized or the authorization was revoked, the transaction was processed early, or the transaction was for the wrong amount.
Easy B2B Payments: ACH is a great option for business-to-business transactions. That includes customers who make one-time or occasional purchases and those who want to pay on an installment plan.
Ideal For Recurring Payments: Do your customers make regular payments for subscription fees, recurring invoices, memberships, rent, or service fees? They can set up an ACH payment and never think about it again, and you’ll receive payments on time without having to send reminders.

ACH Payment Processing Fees Explained

Like all types of payment processing, ACH fees come in a range that depends largely on what processor you use: a merchant services provider, business bank account, or payment service provider (PSP).

Here’s how typical ACH fees stack up to some other common forms of payment:

	ACH	Credit Card	Check
Flat Fee	$0.20-$1.50/transaction	$0.20-$0.30	Up to $4
Percentage Fee	0.5%-1.5%	1.5%-3.5%	N/A
Monthly Fee	$5-$30	N/A	N/A
Reversal Fee	$2-$25	$25-$50	N/A

Keep in mind that ACH processing fees may be listed as a percentage, a flat fee, or both. Which is best for your business depends on your typical transaction size but, in general, a flat fee will be better for many.

Don’t forget that many business bank accounts allow you to accept unlimited ACH transactions with no processing fees. So it may be less costly to process ACH transactions through your bank, rather than through a merchant services provider or PSP. Knowing the fees associated with your bank and payment provider is the key to making the right decision for your business.

4 Types Of ACH Fees

Here is a quick overview of the most common ACH fees:

Percentage Fee: If your ACH pricing includes a percentage fee on each transaction, you’ll be looking at a range of 0.5%-1.5%. That compares favorably to credit card fees, which can go up to 3.5% or more.
Flat Fee: You may be charged a flat fee by your provider for each ACH transaction. These ACH processing fees can run from $0.20-$1.50/transaction. That’s higher than the flat fees you might pay on a credit card transaction. Keep in mind, however, that credit card processors typically charge both a percentage and a flat fee.
Setup & Monthly Fees: Traditional merchant services providers may charge around $15-$30/month to add ACH processing to your account. However, many providers will allow you to include ACH processing at no additional monthly cost. Again, it pays to be aware of the fees, so you can make the best choices.
Reversal Fee: When customers dispute an ACH payment, and you’re faced with a reversal or chargeback, you could see an additional fee. Keep in mind that ACH reversals are significantly less common than credit card reversals, and customers have less time and fewer reasons to challenge ACH transactions. ACH reversal fees range from $2-$25, depending on your payment processor.

Your fees will depend on how your business processes ACH payments. We’ve included cost ranges in our list of the best ACH payment providers.

Some top processors for low-cost ACH include PaymentCloud, Square, and Helcim.

Of course, if you use one of the options included in our list of the best business banks, you could pay $0 for ACH processing.

How To Set Up ACH Payments

The easiest way to set up ACH payments may be through your business bank account. In that case, you’ll simply share your bank information with your customers and ask them to initiate payment.

Here is a list of information you may need to get started:

Information Needed For ACH Transfers

Business Bank Account Information: You’ll need your business bank’s routing number and your checking or savings account number.
Customer Payment Information: To process an ACH payment, you’ll also need the payer’s bank routing number and checking or savings account number.
Virtual Terminal Or Web Form: To process payment for mail orders and telephone orders, you’ll need to key in payment information. For website payments, you’ll need a web form to collect information on your online store’s sales checkout page.
Payment Processor: If you’re taking ACH payments online, you’ll most likely want a payment gateway to transmit the data required for the ACH transaction.
ACH Authorization Form: If customers are paying in person or through the mail, rather than online, you’ll probably ask them to complete an ACH authorization form that includes the following: names and contact information for both the payer and the payee, payment details, including amount and schedule (one time or recurring), a statement authorizing the form, and an explanation of how to cancel the agreement, including how much notice is required. Be sure to date this agreement, and add both the payer’s and the payee’s signature.

If you’re planning to use a third-party payment processor, you will need to pick a provider. The simplest option may be to add ACH as a payment option with your current provider, although you may want to research costs before you take this route.

If you’re starting from scratch, check out our comparison charts for merchant accounts or accounting software as a jumping-off point for your search.

How To Start Accepting ACH Payments

If you want to save money and see more secure customer payment methods, you’re ready to add ACH as a payment option for your customers. Here are five things you can start doing today:

Step 1: Pick A Provider

If you’re already using a merchant service account or payment gateway, start your search there. If you’re just starting to accept payments, take a look at our list of the best payment processors that provide ACH and credit/debit card payment processing in a single package.

Be sure you understand the terms and conditions for using ACH payments with the provider you choose. Pay attention to application fees, account setup fees, and monthly fees that could affect your income. Look at the ACH payment processing fees, too, and make sure they compare favorably to credit card processing fees. If it seems high, keep looking.

Step 2: Set Up Your Account

If you already have a merchant account with a payment processor, this can be as easy as adding ACH as a payment option. You may need to undergo a separate underwriting process or pay additional fees to set up ACH payments.

If you’re planning to use a bank account to accept ACH payments, you will need to set up a business bank account, if you haven’t already. Once your bank account is active, simply provide customers with your bank’s routing number and your account number. Your customers can initiate ACH payments with no further work needed on your end.

Step 3: “Sell” Customers On ACH Payments

ACH payments benefit not only your business but also your customers. Studies show that the cost of issuing a paper check for a business expense averages around $6 per check, including postage, supplies, and employee time.

It’s rare to find a business bank account or corporate credit card that does not offer free bill payment services. These services are a type of ACH transaction. So rather than spending time and money and exposing themselves to the risk of lost mail and identity theft, your customers can pay you safely, securely, and for free using ACH payments.

All you have to do is let them know how. We’ll share some suggestions for doing that in the next section below.

Step 4: Collect & Share Payment Information

If you want to use ACH payments to replace paper check payments, you’ll need to share your business bank account information with your customers and share your own with them. That information is required to initiate the ACH transfer of funds.

If you’re using ACH to replace credit card payments, particularly from online sales, you won’t need to share as much information. Your customers should be able to enter their information on your online store, using a special web form, and initiate the ACH transaction on their own.

Step 5: Start Accepting ACH Payments

Once you’ve picked a payment provider, set up your account, and let customers know you prefer ACH payments, you’re ready to start accepting ACH transactions.

To make sure your customers are aware of this payment option, you may need to highlight ACH payment details on your online store’s checkout page or on the invoices you send out via mail or email.

How To Get Your Customers To Pay By ACH

Although encouraging customers to move to ACH payments may take time and effort, it’s worth the effort. Here are some strategies that can help you along the way:

Invite New Customers To Use ACH Payments

Since it’s hard to change payment behaviors, it makes sense to start new customer relationships on the right foot. That means letting new customers know that ACH is your preferred payment method.

When you onboard new customers, set that as an expectation while providing alternatives for any customers who resist.

Encourage All Customers To Pay By ACH

Most accounts payable departments operate in auto-pilot mode, and they often continue doing things the way they’ve always been done. So you may have to make a little noise if you want to encourage them to adopt a new payment method.

Add a line to invoices, put a notice on your online store’s checkout page, have your customer service team mention it to customers — particularly those who often pay invoices after their due date. Let them know that setting up ACH payments can reduce their workload and simplify the process of paying the bills.

Tell Customers About ACH Benefits

ACH payments make sense for you, the seller. But they also make sense for your customers, particularly those who are used to paying you with paper checks or echecks.

As a recap, when customers use ACH, their payments are:

Less expensive
Labor-saving
Faster
More secure
Less susceptible to fraud
Easier to track

If you have a marketing team, ask for help crafting a letter to “sell” customers on the idea of shifting to ACH payments. Don’t shy away from explaining how ACH transactions benefit your business, why ACH is your preferred payment method, and how your customers can benefit from ACH too.

Repeat The Invitation To Use ACH

Every good salesperson knows it’s not enough to ask just one time. When you want your customers to change their behavior, you’ll need to ask many times, and in different ways, before you hear the Yes you’re hoping for.

Be prepared to follow up. Call some of your customers to make a personal pitch for using ACH. Ask your reps to explain and encourage ACH when they call on business customers and when customers call in their orders.

Make sure to time your requests right. If you’re asking at the end of the month, when payments are already in process, you probably won’t succeed. Asking at the beginning of the month, or the beginning of the year, may yield better results.

Prioritize The Payments & Customers That Will Save You The Most

Make ACH payments an option, and more than a few customers probably will start using ACH. What about the rest? You don’t want to give up, but you also don’t want to waste too many resources chasing down customers who will never change.

Our suggestion: Look at your customer list and decide which you should target for special efforts to convert their accounts to ACH payments. It could be those customers who often pay late and require costly follow-up efforts or those whose payments are large enough that reducing their payment processing fees could make a difference for you.

Maybe it’s those customers who place the same orders every month and have the same payment amount each time. Automating their orders and payments could save you both time and money because ACH makes it easy to process recurring payments.

Incentivize Customers To Use ACH Payments

It shouldn’t be your go-to move. But if your customers firmly resist ACH payments, it may be worth offering them an incentive to make the switch.

Before you can offer a discount to customers who move from paper checks or credit cards, you’ll need to understand how ACH transactions affect your bottom line. Don’t give away more than you’ll realize in savings on payment processing fees.

Keep in mind, though, that ACH transactions can save you more than just transaction fees. You can also avoid the cost of having to chase down late payments, and if your payment and accounting systems are integrated, ACH payments may be faster and less expensive to process.

An ACH discount can look different for every business, but it should be uniform for all customers or for those in similar tiers, such as B2B vs. B2C. A small discount might be a good incentive, or you may see better results with a small one-time discount.

Because using ACH benefits customers, too, you may be able to meet your ACH transaction goals with a one-time reward. Think outside the box and focus on what might motivate customers the most. It could be a charitable discount, a free gift, priority access, or something else. Don’t feel like you need to spend a lot on incentives; the key is finding the right motivation.

Learn From ACH Experts

If you’ve done everything you can think of and you’re still not seeing enough customers start to adopt ACH as their preferred payment method, it may be time to call for help.

You could pay a consultant to offer guidance. First, we suggest you take advantage of a free offer from Nacha, the organization that governs the ACH network. You can sign up for a free 15-minute consultation from Nacha, and use your time to discuss strategies for encouraging customers to pay via ACH transaction.

Should Your Small Business Accept ACH Payments?

If you’re still not certain if ACH transactions are right for your organization, we’ve broken it down for you here. Remember that even if you’re not sure ACH payments are a good fit for your business, it may cost you nothing to add it as a payment option. And more payment options usually are better than fewer.

You Should Add ACH Payments If ...

Your customers have recurring orders
You sell subscriptions or memberships
You process B2B transactions
You have a majority of repeat customers who purchase regularly from you, even if their orders and transaction totals vary
You operate a high-risk business that currently cannot qualify to accept credit and debit card transactions
You are looking for an alternative to high credit card transaction fees
You want to encourage on-time payments, without having to chase them down

You May Not Benefit As Much From ACH Payments If ...

Most of your sales are from one-time customers
The majority of your sales are face-to-face transactions
Overseas transactions are a significant portion of your sales
Instant revenue is enabled by your bank, eCommerce platform, or payment processor

The Bottom Line On ACH Payments

ACH payments electronically transfer funds from a customer’s checking account directly into your business account. ACH payments make your customers’ payments more secure, and they’re typically less expensive for your business to process.

For these reasons, ACH transactions may become your preferred payment method or simply another choice in a variety of payment options that include alternative payment methods like digital wallets, cryptocurrency, and even cash apps such as Venmo or Zelle for Business.

If you want to make more sales and find it easier to collect payments, allow customers to choose the payment method that works best for them. It’s worth taking the time to learn how to accept ACH payments, so you can give customers one more payment option and — hopefully — capture the sale.

FAQs: Setting Up ACH Payments

Do all banks accept ACH payments?

Almost all US banks and credit unions are members of Nacha, the governing body of the Automated Clearing House (ACH) network, and can accept ACH payments. While it’s rare for banks outside the US to accept ACH payments, many other countries have their own automated payment networks, and Nacha coordinates with many of those.

Are ACH deposits available immediately?

ACH deposits are not available immediately. ACH transactions are batched and processed at several set times throughout the day. Once an ACH transaction is processed, you should see the funds in your account within 2-5 business days.

How much does it cost to send an ACH payment?

It’s usually free to send an ACH payment. For example, many banks offer online bill payment services at no charge. However, if you’re the one receiving an ACH payment, you may pay a percentage or a flat fee for each transaction.

How do I set up recurring ACH payments?

It’s easy to set up recurring ACH payment fees. You will need a recurring authorization form with information and signatures from both buyer and seller that includes bank account information, payment amount, payment frequency, and information about how to cancel the agreement. Once you provide this information to your ACH payment processor, your work is done.

What does ACH mean?

ACH is an electronic payment method that shifts funds from one bank account to another. The letters stand for Automated Clearing House, which is the financial network that processes ACH transactions. ACH payments are safe, effective, convenient, and cost-effective.

What platforms let you accept ACH payments?

Many point of sale (POS),cash apps, and online sales platforms let you accept ACH payments. Top names include Helcim, Square, Stripe, Braintree, and Zelle.

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Kate Hoots

Senior Staff Writer at Merchant Maverick

Kate started writing on business topics in 1996, working for groundbreaking B2B newsletters Communication Briefings and The Competitive Advantage. She joined Merchant Maverick in 2020 and is an expert in business banking, insurance, and eCommerce. She has been featured on NBC TODAY, Yahoo News, GoBankingRates, Scripps News Syndicate, and CBS Radio. She has a bachelor's degree in English literature from Lewis & Clark College and lives in Canby, Oregon.

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Sources

Average cost of credit card processing fees (Accessed 09/13/2023) — Bankrate
ACH Costs are a Fraction of Check Costs for Businesses, AFP Survey Shows (Accessed 09/13/2023) — Nacha
2022 APF Payments Fraud and Control Report (Accessed 09/13/2023) — Association For Financial Professionals
Paper check costs include more than just postage (Accessed 09/13/2023) — Rapid Financial Solutions
ACH Fees: The Costs Behind Check Processing (Accessed 09/13/2023) — Payment Cloud
How Much Does Is It Costing Your Business To Accept Paper Checks? (Accessed 09/13/2023) — Paystand

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