7 Essential Features for a Better IVR Payment System

While no one likes paying bills, reducing consumer friction points during the bill-paying process can get your invoices paid faster. Millennials are more likely to prioritize paying bills that are easy to pay before tackling (or ignoring) bills that are more inconvenient. More than half (52%) of consumers report experiencing at least one pain point when paying bills, and 29% encountered multiple issues. Top bill-paying complaints include log-in frustration, authentication issues and a lack of autopay options. Creating convenient payment options improves the customer experience and can lead to more on-time payments.

Thoughtfully designed interactive voice response (IVR) payment systems are convenient, efficient and secure, which benefits both customers and merchants. IVR payment systems use Voice over Internet Protocol (VoIP) technology to guide customers through the payment process over the phone. However, poorly designed IVR payment solutions increase customer frustrations instead of reducing them. The best IVR systems include seven key features that improve the payment experience for customers.

Benefits of Offering IVR for Payments

Customers expect the payment experience to be quick, convenient and secure. Quality IVR services meet all three of these expectations. Customers may also expect merchants to offer an IVR payment option; according to a 2022 survey of more than 2,100 online bill payers, 26% had paid a bill via an automated phone system within the past year.

The IVR payment process is:

  • Fast. By using an automated IVR payment system, customers don’t have to wait to speak with a live agent. The average IVR payment call takes about three minutes. This can be significantly faster than other payment processing options, such as finding the merchant’s payment portal, logging in and resetting a password after multiple failed login attempts or waiting on hold to speak to an agent to complete a payment.
  • Convenient. IVR payment solutions allow customers to pay their bills 24/7—without an internet connection. Customers are also able to enter their payment reference number (e.g., invoice/account/policy number) so they don’t have to remember a password.
  • Secure. IVR payment platforms securely process transactions and reduce the risk that sensitive payment data is exposed either via unauthorized access to internal systems or through call center agents manually accepting payment details over the phone.
    • When using an IVR system, customers can enter credit card information via their phone keypad instead of reading out the information to a contact center agent. This prevents someone from overhearing the conversation and jotting down the information.
    • Merchants should select an IVR system that complies with the Payment Card Industry Data Security Standard (PCI DSS).
  • Affordable. IVR payment systems benefit merchants by increasing efficiency and decreasing labor costs by reducing payment-related calls to contact center agents, whichcost around $5 or more per call. While a few dollars per call may not sound like much, it adds up quickly. In contrast, IVR payment calls cost merchants about 50 cents each.

7 Must-Have IVR Payment System Features

IVR payment systems should provide:

  1. Multiple payment options (credit card and ACH) for full or partial payments
  2. Automated voice services offered in multiple languages
  3. Several ways for customers to connect to the IVR system
    • Call a direct number (printed on statements or included in an email or text notification)
    • Access via the IVR menu (e.g., press 1 to pay your bill)
    • Agent transfers callers to the payment IVR
  4. A variety menu options after the customer completes payment
    • Make another payment
    • Receive an email/text receipt
    • Speak with an agent
    • Store (or update) payment method(s) for future transactions
  5. An outbound IVR system that
    • Delivers payment reminders
    • Allows customers to schedule a convenient time to receive an automated call to make their payment
  6. The ability to easily make changes to your IVR system based on your business’ needs
  7. Integration with billing and accounting systems, allowing payments to be posted directly to your business in real time

CSG Forte offers an IVR payment system with inbound and outbound options for fast, convenient and secure payment processing. With CSG Forte Engage’s IVR solution, live agent calls have been reduced by up to 70% for payments, on average.

Contact us to learn how CSG Forte Engage’s IVR solution can streamline your payment processes and reduce inbound calls to your call center. Get started today.

Taking Card Payments Over the Phone—Finding A Secure Approach

Credit card fraud is widespread—and costly. A recent survey found that 65% of Americans with credit or debit cards have experienced credit card fraud at least once. Not surprisingly, 52% of U.S. bill payers rank security as a top feature in the digital bill payment process.

One area of heightened risk is taking credit card payments from your customers over the phone. Your organization needs to get paid and you can leverage tools to make taking phone and call center payments more secure.

Merchants who accept credit card payments must comply with the Payment Card Industry Data Security Standard (PCI DSS). Payment card brands may fine merchants up to $500,000 per incident if they aren’t PCI compliant at the time of a data breach.

 

Taking Credit Card Payments by Phone Is Risky Business

When consumers think of how contact center agents take payments, they often think of being asked to read off their credit card number, expiration date and CSV code over the phone.

If that doesn’t make you a little nervous—it should. That method of sharing card information may increase the risk of credit card fraud for several reasons:

  • A contact center agent may write the credit card information down on a piece of paper or somewhere visible where another person could walk by and steal the information.
  • A disgruntled employee taking the payment may steal the credit card information, using it to make unauthorized purchases or obtain funds from the account.
  • The customer may be in a public place when reciting credit card details. Someone may overhear the conversation and jot down the credit card information.
  • Reading out a CSV code negates the reason for having it—it’s used to prove the payer has possession of the card at the point of payment. Someone who overhears and captures that CSV can use it to make card-not-present charges.

 

2 Better, More Secure Ways to Take Credit Card Payments Over the Phone

  1. Inbound and Outbound IVR — Customers pay via IVR (interactive voice response) with automated voice prompts and keypad inputs. This eliminates all three problems listed above. The contact center agent transfers the caller to the payment IVR system. The customer enters the card number, expiration date and CSV on their phone keypad when prompted to do so. The IVR system is integrated into a payment gateway to make the transaction. The system then gives the customer a receipt number and the option to receive the receipt by email. To make it even more convenient for your customer, you can leverage an outbound IVR, where a customer can schedule a time to receive an automated call to make their payment.
  2. Live Agent Assist Technology — Businesses can leverage payments technology to have contact center agents quickly send customers a link to a custom online payment page for payment. By using a solution like CSG Forte’s Payer Engagement Platform, contact center agents can easily create an invoice with a few clicks of a mouse and send it to the customer via email or text message. This allows customers to pay promptly and securely—without sharing their credit card information with the agent. This method of payment greatly reduces the risk for fraud and the business’ PII data exposure.

The Payer Engagement Platform is a secure digital payment solution that enables customers to make payments using their preferred channel and payment method, at any time. Its Live Agent Assist feature allows call center agents to quickly create custom invoices to be sent to customers to complete transactions, eliminating the need for agents to collect sensitive information.

Contact us to learn how the Payer Engagement Platform simplifies bill payment, improves the customer experience and reduces fraud exposure.

Why Does Your Business Need a Payment Service Provider?

Payment service providers (PSPs) are pivotal in the digital payments landscape. Their services enable merchants of all sizes to accept various payment methods since consumer preferences differ. Retailers can gain more customers and increase sales by offering more payment choices.

 

What PSPs Do

A PSP is a third-party business partner that provides the technology required for merchants to take different payment methods from their customers. They help connect retailers to financial networks to support collecting credit and debit card payments, electronic bank transfers and more.

PSPs—also called merchant services providers—make payment collection simple, convenient, efficient and secure. They enable businesses to choose a processing option outside of their banks and generally work with numerous financial institutions and card networks. These broad industry connections help make the services more cost-effective and often come with additional features for more value. The result is a seamless payment experience for companies and their consumers.

Functions and services PSPs offer include:

  • Payment processing
  • Transaction security and fraud prevention
  • Payment gateway integration
  • Multichannel and cross-border payments
  • Reporting and analytics
  • Customer support

 

Types of Payment Service Providers

Numerous types of payment service providers exist with certain distinctions among them:

  • Acquirers and merchant account providers: These entities are typically financial institutions like banks. Under these options, each retailer has a separate account and merchant identification number (MID). Conversely, a PSP allows numerous businesses under one account and an overall shared MID.
  • Payment gatewaysMerchants use these solutions to process debit and credit card transactions. They include e-commerce portals and physical point-of-sale (POS) readers. Modern payment gateways may even support payments in digital currencies.
  • Aggregators: Merchant aggregators are PSPs that enroll retailers under the PSP’s MID instead of each merchant having a separate one. The retailer is the “sub-merchant,” and the aggregator collects and allocates the funds for each company it represents.
  • Digital wallet providers: These companies offer financial transaction apps for connected devices that securely store passwords and payment information. They deliver consumers the convenience of being able to shop without a credit or debit card in hand.
  • Mobile payment providersThese businesses provide a specialized digital wallet explicitly made for mobile devices. For example, Apple users can store their payment information in Apple Pay and use their iPhone or iPad to make purchases online or on the go at contactless terminals.
  • Peer-to-peer (P2P) payment providers: P2P payment providers like PayPal and Cash App make it easy to move money between individuals. When users send money, the P2P provider deducts it from a linked bank account. Once the recipient claims the funds, they can withdraw or use them.

 

Benefits of Using Payment Service Providers

  • Simplified payment process: A PSP makes collecting payments a hassle-free experience for retailers and customers alike.
  • Enhanced security and fraud protection: PSPs rely on robust security encryption tools and offer safeguards against payment fraud through features like verification.
  • Accessibility and global reach: Many PSPs support selling in different currencies, so it’s easier for you to be accessible worldwide and establish a global market.
  • Integration and compatibility: A PSP works with numerous technology partners in various industries to ensure its solutions integrate with common tools.
  • Analytics and reporting capabilities: Built-in metrics and reporting help you understand your business’s unique transaction data and simplify reconciliation.
  • Customer support and service: Well-regarded PSPs offer 24/7 technical support and around-the-clock customer service to ensure satisfaction.

 

Key Considerations When Choosing a PSP

Consider these factors when selecting the best PSP for your company:

  • Business type and industry requirements: Not every PSP works with every retailer or serves all industries. List your organization’s unique needs to ensure a potential PSP partner can meet them.
  • Payment methods and currencies supported: Your customers’ payment preferences and locations often dictate the options you want to offer. Choose a PSP supporting the forms you need and the currencies you sell in.
  • Security and compliance measures: Accepting card transactions means following the Payment Card Industry Data Security Standards (PCI-DSS). Look for a PSP that heavily invests in secure technology and is PCI-DSS compliant.
  • Transaction fees and pricing structure: Every PSP prices differently based on factors like transaction volume and payment type. Ensure pricing is clear and transparent to avoid potential billing surprises.
  • Integration options and developer-friendly application programming interfaces (APIs): The ideal PSP solution for your business will work with your existing tools. Look for a partner providing numerous integrations and developer-friendly APIs for straightforward implementation.
  • Reputation and trustworthiness: Working with a well-respected PSP is essential in such a dynamic industry. Choose a company with proven technology and expertise to keep pace.
  • Customer support and service level agreements (SLAs): A reliable PSP will be invested in your company’s success. Ensure your provider offers ongoing support and a service level that meets your business’s needs.

 

Factors to Evaluate for Success

Multiple aspects contribute to your company’s successful PSP integration and implementation, like:

  • Technical integration requirements: Does your current tech stack meet the technical specifications? Is an update or upgrade necessary?
  • Testing and sandbox environments: Does the PSP offer a sandbox environment to test the technology so you can have more confidence in their viability with your processes? Are there any potential hiccups in the process to resolve before full implementation?
  • Onboarding and account setup process: What support does the PSP offer during onboarding? How easy is it to establish your account?
  • Compliance and regulatory considerations: Does the software meet your specific industry regulation needs? Will it automatically comply with future changes?
  • Scalability and future growth potential: Can the PSP scale effectively as needs change? Do they offer support for future growth by helping you identify and implement new technologies and trends?

 

Choose CSG Forte

It’s more important than ever for your business to offer the payment acceptance methods your customers prefer. Doing so helps you stay competitive and resilient in a dynamic retail environment. CSG Forte is an award-winning payment services provider with a fully scalable and PCI-DSS-compliant payment platform. Our team has the expertise and resources to help you identify, implement and support the best solution for your needs.

Contact us for advice, or fill out the online application to open an account today.

ACH Versus Wire Transfer

Automated Clearing House (ACH) transactions and wire transfers are two types of electronic money transfers between financial institutions. These funds typically move between buyers and sellers and offer benefits over using physical checks. Several factors vary between the two payment methods and can make one option better than the other for your needs. Learning about the difference between ACH and wire transfers helps you choose the best payment method to optimize your cash flow and support your company’s future growth.

 

Understanding ACH Transfers

ACH transfers go through a centralized system overseen by the National Automated Clearinghouse Association (Nacha). Payers who have the recipient’s banking information can originate the transaction. Recipients can also place a request for payment with their bank and documented authorization to debit the payer’s account.

Banks enter the transaction information into the ACH network, which bundles them according to institution and sends them for processing several times daily. When the data aligns, the transaction receives approval and begins the settlement process.

Benefits of ACH Transfers

ACH is a preferred payment method for several reasons, including:

  • Cost-effectiveness: ACH transfers are generally the most affordable electronic payment type.
  • Simplicity and convenience: Originating or accepting an ACH payment is easy and quick.
  • Lower error risk: There’s a reduced potential for error with less manual handling in ACH transfers.

Limitations of ACH Transfers

Using ACH transfers versus wire transfers may have some drawbacks, including:

  • Longer processing time: Most ACH transactions settle in two to three business days, but some can take longer. To mitigate these timelines, CSG Forte offers same-day ACH settlement services to get your money to your account faster.
  • Potential for insufficient funds: This situation results in an ACH return, for which the financial institution may charge the payer an insufficient funds fee. The recipient may also incur additional costs for ACH returns.

Common Use Cases and Industries for ACH Transfers

ACH transfers are common, with Nacha estimating the network helps process about 10 million transactions daily. Use cases and relevant industries include:

  • Employee payroll via direct deposit
  • Vendor payments that allow businesses to take advantage of prompt payment discounts
  • Consumer payments that can help avoid late fees
  • Account transfers to move user funds between different institutions, such as from a bank to a brokerage-held retirement fund
  • Claims payments for insurance companies to reimburse members faster
  • Taxpayer refunds from government revenue agencies

 

Exploring Wire Transfers

Wire transfers also go through clearing houses, with the organization determined by the funds’ destination. International wires typically route through the Society for Worldwide Interbank Financial Telecommunication (SWIFT), while domestic ones generally use the Clearing House Interbank Payments System (CHIPS).

A key difference between wire and ACH transfers is that only the sender can initiate a wire transfer.

Advantages of Wire Transfers

Benefits of wire transfers include:

  • Speed and immediate availability: Funds settle more quickly than payments initiated via ACH. Once cleared, they’re immediately available for the recipient’s use.
  • Global reach: Senders can transmit funds to any bank account worldwide. Financial institutions use the SWIFT code to identify the bank and an international bank account number (IBAN) to pinpoint the final destination.
  • Higher security: Financial institutions generally place higher security protocols on wires due to fraud risks. These transactions may undergo additional controls, such as verification calls, to ensure legitimacy.

Drawbacks of Wire Transfers

Conversely, the cons of wire transfers include:

  • Higher costs and fees: Wires are typically more expensive to send than ACH payments.
  • Complex process and documentation requirements: Because more scrutiny surrounds them, wires can be more challenging to initiate.
  • Extremely limited irreversibility once they’ve cleared: Except in cases of a bank error, it can be difficult to reclaim or reverse wired funds post-clearance.

Preferred Use Cases for Wire Transfers Versus ACH

Cases where a wire transfer may be ideal over an ACH payment include:

  • Large transactions, such as commercial loan payoffs or corporate real estate acquisitions
  • International transfers
  • Small-volume or one-time transactions where the timing or amount justifies the higher costs, like residential property settlements

 

Key Differences Between ACH and Wire Transfers

Explore the primary differences between ACH payments versus wire transfers to make the most informed choice for your company:

  • Processing speed: ACH transfers are less rapid than wire transfers, which can clear in just minutes.
  • Costs and fees: While the average cost of an ACH transfer is between $0.26 and $0.50, bank fees for a wire can be up to $50.
  • Transaction limits: Nacha has set the same-day ACH per-transaction limit at $1 million, and banks may also impose daily or transaction maximums.
  • Security and risk: While financial institutions focus on wire transfer security, the highly irreversible nature inherently carries more risk.
  • Domestic versus international transactions: The ACH network is ideal for intra-U.S. transfers, but sending funds globally typically requires a wire transfer.

 

Factors to Consider When Choosing Between ACH and Wire Transfers

There are numerous aspects to consider when choosing the best electronic payment method for your business’s transaction, including:

  • Transaction urgency: Is the transaction’s settlement timing flexible? If so, the higher affordability of ACH may make it a better option to meet your needs.
  • Transaction amount: Is the amount you’re transferring beneath the ceilings imposed by Nacha and your bank? ACH is a viable alternative for cases that are within the limits.
  • Geographic reach: Is your recipient domestic or international? ACH is a preferred method for transfers within the United States.
  • Security requirements: Is it possible to initiate the transaction through your online banking portal, or are you required to personally visit the bank? The heightened security surrounding wire transfers may pose a time investment, making it less convenient to use.
  • Cost considerations: Is the transaction’s nature enough to justify the higher fees associated with wires? If not, ACH is the better choice for cost efficiency.

 

Case Studies of ACH Transfers

Our case studies are an ideal place to explore how CSG Forte helps businesses achieve more efficiency and better meet their customers’ needs. Read through examples like:

  • Buildium: ACH services from CSG Forte helped this property management software company see an almost 40% year-over-year revenue growth through streamlined, cost-effective payment options.
  • Priority Software: This respected software provider experienced a 115% annual revenue growth after implementing ACH payment solutions through our integrated technology.
  • Rentec Direct: The digital property management solutions company has seen an average of 98% revenue growth and a substantial decline in late payments after integrating our ACH payment tools.

 

Choose CSG Forte for ACH Payment Processing

CSG Forte’s online payment processing platform is a scalable, simple-to-use solution for accepting these electronic payments. We’re an award-winning Nacha-preferred partner with industry-leading integrations and exceptional customer success support.

Contact us to get personalized advice for your business, or complete an online account application today.

How Can Your Business Use Text to Pay?

Late or missed customer payments can occur for a variety of reasons, including forgetfulness and not knowing a payment’s due date. Whatever the case, late payments can impact your company’s bottom line.

Fortunately, there is a proactive way to increase payment propensity through SMS—convenient reminders to pay via text messages delivered directly to your customer’s mobile phone. SMS messages outperform traditional communication methods, with a 42% open and read rate versus only 32% by email.

 

What Is Text to Pay?

Text to Pay is an approach to promoting payment through text message reminders. Using this service boosts your business’s efficiency and accuracy in payment capture. It’s also helpful for reducing paper waste and invoicing expenses.

These reminders are business-initiated messages to customers who have opted-in to receive SMS messages. The SMS messages display a secure, clickable link that automatically takes the user to the payment platform to easily complete their payment. For example, CSG Forte’s Text to Pay solution directs users to a secure webpage. Once the customer accesses the site, they can enter their details using our reliable payment-processing platform.

SMS payment reminders help facilitate quicker payments and allow your business to create a more seamless and enjoyable customer experience. Since the reminder link is accessible anytime and anywhere, these services can help your company avoid or reduce late or missed payments.

 

How Text to Pay Works

CSG Forte simplifies the process of sending SMS payment reminders:

  1. Develop a dedicated opt-in site: Your customers must consent before you can send them text messages. We host an opt-in webpage that you can customize to meet your needs.
  2. Configure your reminder messages: You can set up multiple notifications in our system. We’ll forward them on your behalf directly to your customers’ devices with the secure link to your mobile-friendly site.
  3. Capture the payment: Customers enter their payment information once they follow the link. CSG Forte’s online payment processing platform collects and distributes the funds to your business.

 

3 Major Business Benefits of Text to Pay

Equipping your business with text payment reminders delivers substantial value in three primary ways.

1. Convenience

Smartphone ownership is prevalent today, with over 68% of the global population having access to mobile devices. The average U.S. user spends over three hours a day on their phone. As a result, businesses have more opportunities to reach their customers where they are. Doing so enables your company to collect payments sooner and more efficiently while providing the convenience that modern consumers expect.

With CSG Forte’s solution, you can increase customer convenience by adding multiple payment options, such as ACH debits and credit cards.

2. Higher Response Rates

Since customers are more likely to open their SMS payment reminders, they’re also more likely to act on them. This improved response rate compared to other communication channels helps you generate more payments faster.

3. Time Savings

It takes just moments to configure and deploy payment reminders by text, getting them in front of consumers more quickly than traditional methods. Using technology helps eliminate the manual invoicing process to save time. You’ll also spend less time on follow-up communication due to the increased payment propensity.

 

Industries and Use Cases for Text to Pay

Multiple industries can realize the benefits of Text to Pay, including:

  • Retail and e-commerce companies wanting to simplify the payment process
  • Service-based businesses, such as healthcare providers, salons and landscaping professionals
  • Food and beverage vendors for home-delivery subscriptions
  • Nonprofit organizations and fundraising campaigns

 

Security and Compliance Considerations

When choosing a Text to Pay solution, there are multiple security and compliance factors to consider, including:

 

How to Implement Text to Pay in Your Business

Implement Text to Pay by following these steps:

  1. Select a provider or platform: Select a provider or platform that will meet your business’s needs and is familiar with working with businesses of your size and/or in similar industries.
  2. Integrate with existing systems: True integrations happen when you work with innovative developers focused on delivering solutions. Ensure the platform or provider you choose works with your current infrastructure.
  3. Maximize success with best practices: Abiding by all industry privacy and permission laws is crucial when using a Text to Pay solution. Follow industry best practices to stay compliant.

 

Choose CSG Forte for Text to Pay Solutions

CSG Forte provides complete payment solutions for many industries via in-person, mobile and online channels. Our capabilities include customizable deployment for SMS payment reminders to help you achieve higher efficiency in your billing. This service is fully compatible with our other payment solutions covering the entire revenue cycle, from bill presentment to returns management. We individualize our approach based on your unique business needs.

Contact us to learn more about Text to Pay can benefit your business.

Start Making ACH Payments With CSG Forte

In today’s fast-paced digital world, the convenience and efficiency of electronic payments have made them increasingly prevalent. One such method gaining popularity is ACH payments. ACH, short for Automated Clearing House, refers to a network that facilitates the secure transfer of funds between bank accounts.

Below, we will explore the fundamentals of ACH payments and how to make one.

 

What Do You Need to Make an ACH Payment Online?

To make an ACH payment, you typically need the following information:

  • Bank account details: You will need the bank account number and the routing number of the account from which the funds will be debited.
  • Authorization: Depending on the nature of the ACH payment, you may need the recipient’s authorization to initiate the transaction. This is common for recurring payments or when debiting funds from another individual or business account.
  • Payment amount: You must specify the amount of money you wish to transfer through the ACH payment.
  • Payment purpose: Indicate the purpose of the transaction, whether it is for a bill payment, payroll, business transaction or another appropriate category.
  • Payment processing method: Determine the method through which you will initiate the ACH payment—this can be done through online banking platforms, payment processors or specialized ACH service providers.
  • ACH processing information: If you are initiating the ACH payment through a third-party service provider or a payment gateway, you may need to provide additional information such as the provider’s name, account details and any required authentication credentials.

 

Options for Making an ACH Payment

When it comes to making ACH payments, there are two primary methods—ACH debit and ACH credit:

  • ACH debit: ACH debit involves initiating a payment by granting authorization to a recipient to pull funds from your bank account. This method is commonly used for recurring payments or one-time payments where you provide your bank account information to the recipient. Examples of ACH debit transactions include utility bill payments, mortgage payments and subscription fees.
  • ACH credit: ACH credit involves pushing funds from your bank account to the recipient’s bank account. In this case, you are the one initiating the payment and providing the recipient’s bank account information. ACH credit payments are commonly used for various purposes such as payroll direct deposits, vendor payments and tax refunds.

 

How Do I Make an ACH Payment?

You can send ACH payments online via an ACH debit payment or an ACH credit payment.

 

How to Make an ACH Debit Payment

Follow these steps regarding how to do an ACH transfer via debit payment:

  1. Gather recipient information: Collect the necessary recipient information, including the recipient’s name, bank account number and bank routing number.
  2. Verify sufficient funds: Confirm that you have sufficient funds in your bank account to cover the ACH debit payment amount. Insufficient funds can result in declined transactions and potential fees.
  3. Choose an ACH debit method: Determine the method you will use to initiate the ACH debit payment—you can do so through online banking, a payment processor or specialized ACH service providers. Check with your bank or chosen service provider to understand the specific process for initiating ACH debit payments.
  4. Provide authorization details: Depending on your chosen method, you may need to provide the recipient’s bank account and routing numbers, along with the payment amount and any additional information required by the service provider or platform.
  5. Initiate the payment: Follow the instructions provided by your bank or payment provider to initiate the ACH debit payment. This may involve logging into your online banking account, accessing the payment section and entering the necessary payment details.
  6. Confirm and review: Before finalizing the transaction, review the payment details to ensure accuracy. Verify the payment amount, recipient information and any additional information required for the transaction.
  7. Submit the payment: Once you have reviewed and confirmed the payment details, submit the ACH debit payment. The transaction will be processed, and the funds will be electronically debited from your bank account and transferred to the recipient’s account.
  8. Record and retain documentation: Keep a record of the ACH debit payment, such as transaction confirmations, receipts or any other documentation provided by your bank or payment service provider.

 

How to Make an ACH Credit Payment

Follow these steps to make an ACH payment via credit:

  1. Collect recipient information: Obtain the necessary information from the recipient to initiate the ACH credit payment. This data includes the recipient’s name, bank account number and bank routing number.
  2. Verify your bank’s ACH credit service: Ensure that your bank supports ACH credit transactions. Not all banks offer this service to their customers, so it’s important to confirm beforehand.
  3. Set up online banking or ACH service: If you haven’t already, enroll in online banking or an ACH service provided by your bank. This measure will allow you to initiate ACH credit payments conveniently.
  4. Access the payment section: Log in to your online banking account or ACH service provider’s platform and navigate to the payment section or ACH transfer section.
  5. Provide payment details: Enter the recipient’s bank account number, routing number, payment amount and any additional information required by your bank or service provider. Double-check the accuracy of the information to ensure the funds are directed to the correct account.
  6. Review and confirm: Review the payment details before finalizing the transaction. Verify the payment amount, recipient information and any additional details you enter.
  7. Initiate the payment: Once you have confirmed the payment details, submit the ACH credit payment request. Your bank or service provider will process the transaction and transfer the funds from your account to the recipient’s account.
  8. Retain documentation: Keep documentation of the ACH credit payment for your records.
  9. Follow up: If necessary, follow up with the recipient to confirm that they have received the ACH credit payment successfully.

 

ACH Payments vs. Direct Deposits

ACH payments and direct deposits are both electronic methods of transferring funds between bank accounts, but they differ in their purpose and the direction of the transaction.

Direct deposits are a specific type of ACH payment that refers to funds being electronically deposited into a recipient’s bank account, typically for the purpose of receiving income or funds owed. Direct deposits are commonly used for payroll deposits, government benefit payments, tax refunds, pension payments, and other regular or recurring income streams.

Direct deposits are always initiated as ACH credits, with funds pushed into the recipient’s account. The payer, such as an employer or government agency, initiates direct deposits to the recipient’s designated bank account. Recipients often need to provide their bank account and routing numbers to the payer to set up direct deposit.

Key differences between ACH payments and direct deposits include:

  • Purpose: ACH payments encompass a broader range of electronic fund transfers, including both payments and receipts, while direct deposits specifically refer to receiving funds into an account.
  • Direction: ACH payments can be either ACH debit, which involves pulling funds from the payer’s account, or ACH credit, which involves pushing funds to the recipient’s account, whereas direct deposits are always ACH credit payments.
  • Usage: ACH payments are more versatile and can be used for various purposes, while direct deposits are primarily used for recurring income or benefit payments.

 

Accepting ACH Payments From Customers

Accepting ACH payments from customers can provide convenience and flexibility for your business. Here’s an overview of the steps involved in setting up and accepting ACH payments:

  1. Verify ACH payment support: Ensure that your business has the capability to accept ACH payments. Contact your bank or payment service provider to confirm if they offer ACH payment processing services. If not, explore alternative solutions such as third-party payment processors or specialized ACH service providers.
  2. Obtain authorization: Before initiating ACH payments from customers, you need to obtain proper authorization. This can be done by having customers sign an authorization agreement or including authorization clauses in your terms and conditions.
  3. Collect customer information: Gather the necessary information from your customers to process ACH payments. This typically includes their bank account number, routing number and authorization to debit their account. Consider using secure methods to collect and store this sensitive information.
  4. Set up payment processing system: Set up a payment processing system that supports ACH payments. You can complete this step using your bank’s online banking platform, a payment gateway or a specialized ACH payment processing service.
  5. Integrate the ACH payment option: If you have an online store or payment portal, integrate the ACH payment option to provide customers with the choice to pay via ACH. Work with your web developer or payment service provider to enable ACH as a payment method.
  6. Educate customers: Clearly communicate to your customers that you accept ACH payments. Update your website, invoices and other communication channels to inform customers of this payment option. Provide instructions on how they can provide their bank account information and authorize ACH payments.
  7. Process ACH payments: Once customers provide their authorization and necessary payment information, initiate the ACH payments through your chosen payment processing system. Follow the instructions provided by your bank or service provider for initiating ACH debit transactions securely.
  8. Monitor and reconcile payments: Regularly monitor your ACH payment transactions and reconcile them with your records. Keep track of successful payments, failed transactions and any necessary follow-up actions, such as resolving insufficient funds or other payment issues.
  9. Ensure security and compliance: Protect customer data and maintain compliance with applicable regulations. Implement security measures such as encryption and access controls to safeguard customer information.

By offering ACH payment options to your customers, you can streamline payment processes, reduce reliance on paper checks and make it easier for people to do business with you.

 

Choose CSG Forte to Learn How to Make an ACH Payment

ACH payments have revolutionized the way businesses and individuals handle their financial transactions. Offering convenience, cost savings and enhanced security, ACH payments have become a preferred method for many individuals and organizations. As technology continues to advance, ACH payments are likely to play an increasingly significant role in our digital economy.

Contact the team at CSG Forte to learn more about how to make an ACH transfer.

How to Set up a Merchant Account

If you want to accept electronic payments from customers, you may need to set up an online merchant account. Whether you’re running an online store, a brick-and-mortar business or a combination of both, having a merchant account enables you to process credit card and other electronic payment transactions securely and efficiently.

Below, we cover what you need to know about how to open a merchant account.

 

6 Steps to Open a Merchant Account

Opening a merchant account is an essential step for businesses to accept electronic payments. Here are six key steps to setting up a merchant account:

  1. Determine your business needs: Assess your business requirements, including the expected transaction volume and the types of payments you want to accept, such as credit cards, debit cards and mobile payments. You should also consider whether you accept payments online, in-store or both. Understanding your needs will help you choose the right merchant account provider.
  2. Research merchant account providers: Conduct thorough research to identify reputable merchant account providers that align with your business needs. Compare factors like pricing, transaction fees, contract terms, integration options, security measures, customer support and industry reputation. Consider reading reviews and seeking recommendations from other business owners as well.
  3. Complete the application: Once you’ve selected a merchant account provider, complete the application process. You’ll typically need to provide information about your business, such as its legal name, contact details, industry type, average transaction amount, tax identification number and estimated monthly sales volume. Be prepared to submit supporting documents like identification, bank statements, business licenses and financial statements.
  4. Underwriting and approval: The merchant account provider will review your application and perform underwriting to assess the risk associated with your business. This process verifies your operation’s legitimacy, financial stability and compliance with industry regulations. The provider may request additional documentation or clarification during this stage. Once approved, you’ll receive a merchant identification number (MID) or an approval notice.
  5. Setup and integration: After approval, work with your merchant account provider to set up the necessary payment processing infrastructure. This typically involves integrating payment gateways or APIs into your website, point-of-sale system or mobile app. Your provider will guide you through the integration process and provide instructions on configuring the payment processing settings.
  6. Test and go live: Before accepting live transactions, thoroughly test your payment processing setup to ensure everything works correctly. Perform test transactions using various payment methods, such as different card types or test payment credentials provided by your merchant account provider. Verify that transactions are processed accurately and funds are correctly deposited into your designated bank account. Once testing is successful, you’re ready to go live and start accepting real customer payments.

 

What Types of Merchant Services Do You Need?

When setting up a merchant account, you’ll typically need various merchant services to facilitate electronic payment processing and manage your business transactions. Here are some essential types of merchant services you may need:

  • In-person: In-person merchant services refer to the suite of services, tools and hardware provided by financial institutions and payment processors to facilitate payment transactions that take place physically, usually at a brick-and-mortar store or in a face-to-face interaction between a business and its customers. These services are designed to enable operations to accept various forms of payment, process transactions securely and manage their point-of-sale (POS) operations effectively.
  • Mobile: Mobile merchant services are a type of payment processing solution that enables businesses to accept payments through mobile devices, such as smartphones and tablets. These services leverage the convenience of mobile technology to facilitate transactions on the go, without the need for traditional POS systems or dedicated hardware.
  • E-commerce: E-commerce merchant services are a set of solutions and tools provided by financial institutions, payment processors and third-party service providers to facilitate online transactions for businesses engaged in e-commerce. These services enable businesses to accept payments securely through their online platforms or websites.
  • IVR: Interactive Voice Response (IVR) merchant services refer to a type of telephone-based payment processing system that allows customers to make payments and conduct transactions through an automated phone system. IVR systems use voice prompts and keypad responses to guide customers through the payment process.

 

Completing the Merchant Application

Completing a merchant application is a crucial step in setting up a merchant account. With our online application, you can start accepting card and ACH payments. If you need hardware or a more complex POS system, contact our sales department and we’ll guide you through the additional steps. Here are some key considerations and steps to help you navigate the process:

  1. Gather required information: Before starting the application, gather all the necessary information and documents you’ll need to provide. At CSG Forte, we require your business’s legal name, address, contact details, tax identification number, ownership structure and business type. You will also need to provide financial information, including your routing number and account number for your business checking or savings account.
  2. Fill out the application form: Start the application process by accessing our application form. Take care to complete each section accurately.
  3. Contract review and agreement: Review the Merchant Service Agreement (MSA) carefully to ensure you understand our transaction processing services, pricing, limits and terms.
  4. Review and submit the application: Once you have completed the application form, carefully review the entire application for accuracy. Double-check that all fields are filled out correctly and that you have agreed to the MSA. Once reviewed, submit the application.
  5. Follow up and provide additional information: After submitting the application, we may contact you for further information or documentation if needed. Please stay responsive and promptly provide any additional details or clarifications we may request, as this helps expedite the underwriting process.

 

Choose CSG Forte for Merchant Solutions

At CSG Forte, we offer numerous merchant solutions and plenty of excellent reasons why you should choose us for your operational needs:

  • Robust payment processing options: We provide a wide range of payment processing options, including credit card processing, debit card processing, ACH payments and electronic check processing.
  • Advanced security features: We prioritize security and offer advanced fraud detection and prevention measures to safeguard transactions and sensitive customer data.
  • Integration capabilities: We offer integration with various e-commerce platforms, POS systems and shopping carts, making it easier for you to seamlessly incorporate your payment processing solutions into your existing systems.
  • Responsive customer support: We prioritize providing excellent customer care, including dedicated account managers who can assist with setup, ongoing support and troubleshooting.

Contact the experts at CSG Forte to learn more about how to set up a merchant account or get started with our merchant solutions today.

What Is an ACH Deposit?

An ACH payment is a process by which funds are electronically transferred from one bank account to another using the Automated Clearing House (ACH) network. On the receiving end, an ACH deposit is a method of receiving funds directly into an account, commonly used for income, refunds or other types of deposits. ACH deposits are initiated as ACH credits, where the funds are pushed from the payer’s bank account to the recipient’s bank account.

 

How an ACH Direct Deposit Works

The following is the typical process for making an ACH deposit:

  1. Authorization: The recipient provides the payer with their bank account information, including the account number and routing number. This information is necessary to identify the recipient’s bank and the specific account where the deposit will be made.
  2. Payer initiation: The payer, whether it’s an employer, government agency, business or other entity, initiates the ACH deposit through their bank or a payment processor. They provide the recipient’s bank account information, the deposit amount and any additional information required by their bank or payment service provider.
  3. ACH network processing: The payer’s bank or payment processor submits the ACH deposit request to the ACH network. The ACH network serves as the central system that facilitates the electronic transfer of funds between banks.
  4. Originating Depository Financial Institution (ODFI): The payer’s bank acts as the ODFI and is responsible for initiating the ACH deposit on behalf of the payer. The ODFI submits the deposit request to the ACH network and debits the payer’s account for the deposited amount.
  5. Receiving Depository Financial Institution (RDFI): The recipient’s bank, known as the RDFI, receives the ACH deposit request from the ACH network. The RDFI verifies the recipient’s account and ensures that it matches the account information provided in the deposit request.
  6. Deposit posting: Once the RDFI verifies the recipient’s account and the deposit details, the funds are credited to that account. The amount of the ACH deposit is added to the recipient’s account balance.
  7. Notification: Depending on the recipient’s preferences and the bank’s notification system, the recipient may receive a notification, such as an email or mobile alert, informing them of the successful deposit.

 

What Role Do ODFI and RDFI Play in ACH Deposits?

In the context of ACH deposits, the ODFI and RDFI play distinct roles in facilitating the electronic transfer of funds through the ACH network. Here’s an overview of the roles and responsibilities of each:

The ODFI is the financial institution that initiates the ACH deposit on behalf of the payer. The ODFI can be a bank, credit union or other financial institution that is an ACH participant. Responsibilities of the ODFI include:

  • Receiving the ACH deposit request from the payer
  • Verifying the payer’s account to ensure sufficient funds for the deposit
  • Submitting the ACH deposit request to the ACH network
  • Debiting the payer’s account for the deposited amount
  • Acting as the primary point of contact for the payer regarding ACH deposit transactions

The RDFI is the financial institution where the recipient holds their bank account. The RDFI receives the ACH deposit request from the ACH network and processes the deposit on behalf of the recipient. Responsibilities of the RDFI include:

  • Receiving the ACH deposit request from the ACH network
  • Verifying the recipient’s account information provided in the deposit request
  • Crediting the recipient’s account with the deposited funds
  • Acting as the primary point of contact for the recipient regarding ACH deposit transactions
  • Providing account statements and notifications to the recipient related to the deposit

Both the ODFI and RDFI play vital roles in ensuring the secure and efficient transfer of funds in ACH deposits. Collaboration between the ODFI and RDFI, along with the ACH network, enables seamless electronic transfers of funds through the ACH system.

 

ACH vs. Direct Deposits

ACH payments and direct deposits share several similarities due to their common reliance on the ACH network for electronic fund transfers. Here are some key similarities between ACH payments and direct deposits:

  • Electronic fund transfers: Both ACH payments and direct deposits involve electronic transfers of funds between bank accounts. They eliminate the need for physical checks and provide a more efficient and secure method of transferring money.
  • ACH network: Additionally, ACH payments and direct deposits utilize the same ACH network infrastructure for processing transactions. The ACH network acts as the intermediary that facilitates the transfer of funds between the payer’s and recipient’s financial institutions.
  • Bank account information: To initiate ACH payments and direct deposits, the payer or initiating entity requires the recipient’s bank account information, such as the account number and routing number. This information is necessary to identify the recipient’s bank and ensure the funds are deposited into the correct account.
  • Recurring payments: ACH payments and direct deposits can both be used for recurring transactions. For example, recurring bill payments can be set up as ACH payments, while recurring income streams like payroll or government benefits can be delivered through direct deposits.
  • Cost savings: Both ACH payments and direct deposits offer cost savings compared to traditional paper-based methods. They reduce the expenses associated with check printing, mailing and manual processing, resulting in more efficient and cost-effective payment and deposit processes.
  • Convenience and efficiency: ACH payments and direct deposits also provide convenience and efficiency for both payers and recipients. They eliminate the need for physical checks, reduce administrative workload and offer faster access to funds.

Additionally, there are some differences between ACH payments and direct deposits. These key differences include:

  • Purpose: ACH payments encompass a broader range of transactions, while direct deposits specifically refer to receiving funds into an account.
  • Direction: ACH payments can be either ACH debit or ACH credit, whereas direct deposits are always ACH credits.
  • Usage: ACH payments are more versatile and can be used for various payment purposes, while direct deposits are primarily used for recurring income or benefit payments.

 

How Long Does an ACH Deposit Take?

The time it takes for an ACH deposit to complete can vary depending on several factors, including the participating financial institutions, the ACH network’s processing schedule and any specific timing requirements set by the initiating entity. Here’s a general timeline to give you an idea of the ACH deposit process:

  1. Initiation: The initiating entity, such as an employer or government agency, submits the ACH deposit request to their financial institution (ODFI). This typically occurs shortly before the desired deposit date.
  2. ODFI processing: The ODFI processes the ACH deposit request, verifies the payer’s account and submits the deposit to the ACH network. This step usually takes place on the same day the request is received from the initiating entity.
  3. ACH network processing: The ACH network acts as a central clearinghouse, routing the deposit request to the receiving financial institution (RDFI). This step can vary depending on the ACH network’s processing schedule.
  4. RDFI processing: Upon receiving the deposit request from the ACH network, the RDFI credits the funds to the recipient’s bank account. The timing of this step can vary, but it typically occurs on the same day the RDFI receives the deposit request.

 

Is ACH Direct Deposit Replacing Paper Checks?

ACH deposits have increasingly been adopted as a more efficient, secure and convenient alternative to paper checks for various transactions. Here are some reasons why ACH deposits are replacing paper checks:

  1. Faster availability of funds: ACH deposits typically result in faster availability of funds compared to paper checks. With ACH, funds are electronically transferred and deposited directly into the recipient’s bank account, eliminating the time required for mailing and check clearance.
  2. Reduced processing time and costs: ACH deposits reduce the time and costs associated with printing, distributing and reconciling paper checks, as well as manual processing and check handling fees.
  3. Enhanced security: Additionally, ACH deposits provide increased security compared to paper checks. Electronic transfers minimize the risk of lost or stolen checks, and the funds are electronically transferred between financial institutions, reducing the potential for physical tampering or fraud.
  4. Convenience and efficiency: ACH deposits offer convenience for both payers and recipients. Payers can initiate payments electronically, eliminating the need for physical check preparation and mailing. Recipients receive the funds directly into their bank accounts, avoiding the inconvenience of depositing paper checks in person or through remote deposit methods.
  5. Improved recordkeeping: ACH deposits also provide a digital record of the transaction, making it easier for both payers and recipients to track and reconcile payments. This eliminates the need for manual recordkeeping and simplifies financial management.
  6. Eco-friendly and sustainable: Finally, ACH deposits contribute to environmental sustainability by reducing the use of paper checks and envelopes. By transitioning to electronic transactions, companies and individuals can minimize their carbon footprint and support sustainable practices.

 

Choose CSG Forte for ACH Payments

At CSG Forte, we provide a range of financial services, including ACH payment solutions. When you choose CSG Forte, you can accept ACH payment processing and implement online ACH payments. Benefits of working with us include:

  • Saving time
  • Reducing costs
  • Enhanced security
  • Improving cash flow
  • Sending payments with ease
  • Receiving payments in just days
  • Getting same-day payment options
  • Tracking funds via transfer confirmations
  • Easy implementation process

Contact the CSG Forte team to learn more or get started today.

How to Accept ACH Payments for Small Businesses

The Automated Clearing House (ACH) is the network that oversees transfers from one financial institution to another. When you accept ACH payments as a business, you allow your customers to transfer funds from their accounts to yours. Leveraging online ACH payments can be a valuable practice for all types of businesses.

 

How to Receive ACH Payments

To begin processing ACH payments, follow the simple steps below.

 

Step 1: Set Up an ACH Merchant Account

The ACH network oversees electronic transfers from one bank account to another. To process these transactions, you must have an account with the ACH network to identify your business and access customer bank accounts for withdrawals. Typically, you’ll create this account through an e-payment platform.

When you set up your account, you must provide various information to prove your identity as a merchant. This information includes:

  • Certificate of incorporation
  • Federal tax ID
  • Proof of company address
  • Valid ID for company owners

Additionally, you’ll have to provide an estimated processing volume of your electronic fund transfers.

 

Step 2: Request Customer Authorization

After verifying your company through the ACH network, you can request customer authorization, which is essential to receive ACH payments. Authorization requirements exist to protect consumers from unwarranted account withdrawals from businesses. You have a few options to retrieve valid authorization from a customer. You can:

  • Receive verbal agreement over a recorded phone message.
  • Ask your customers to submit an online payment authorization form.
  • Have your customers sign a physical confirmation form.

Online authorization forms will file directly to the ACH network for authorization. At CSG Forte, we simplify the authorization process with an online authorization process on our platform. Send the authorization form to your customers to complete the process in a few minutes.

 

Step 3: Create the Payment

With your merchant account and customer authorization, you’re ready to set up the payment with your customer. During the authorization process, your customer will provide the following information:

  • Bank name
  • Account number
  • Routing number
  • Customer name

You’ll use this information alongside your merchant details to set up the payment. You’ll also set the amount required for transfer. In the case of recurring payments, you will only need authorization and bank account information for your initial transaction.

 

Step 4: Submit Details to ACH Network

Your final step is inputting all information into the ACH system for the transfer to take place. You’ll rely on processing software to handle this last step. When you input the payment information, the ACH network alerts both banks involved in the transfer. From there, the customer’s bank will provide the funds requested by you, the merchant.

 

How Long Does It Take to Receive an ACH (eCheck) Payment?

ACH payments take about three to five business days to process through the network and appear in your bank account. The process takes a few days because the ACH network needs to verify the transaction. ACH batches only operate during the business week and close at 5 p.m. EST, so consider the payment’s timing when determining when it should show up in your account.

You can use Same Day ACH payments if you need a faster payment option. In these cases, ACH transactions are sent and received the same day the request is made rather than the following morning. You can expect these payments to be settled the day after submitting them.

 

The Benefits of Accepting ACH and eChecks for Your Business

When you accept eCheck payments, your business and consumers can enjoy the benefits.

Convenience

The initial authorization process for ACH payments can take as little as a few minutes for you and your customers. Once authorization is complete, your customers can send payments to you with the press of a button. These payments’ convenience is undeniable, especially for e-commerce businesses handling all transactions online.

More convenient, digital payment methods improve the consumer experience for all types of products and services. While you can enjoy the convenience of eliminating paper checks, your customers can skip writing them out and mailing them to you. Happier customers lead to more business and a positive reputation all around.

Cost

Processing physical checks and counting out cash can be an expensive process with the manual labor involved. Additionally, credit and debit card charges can be on the pricier side. ACH payments typically come with low, flat rates per transaction, allowing your business to offer convenient payments without overextending your financial resources.

You can reinvest the money you save on administrative overhead into your business and its growth. The reduced manual labor can also decrease the need for more internal team members, saving money on payroll—even as you grow.

Protection

The ACH network is highly regulated and secure to keep money safe as it transfers from one bank account to another. While many layers of security protect financial data as it moves from institution to institution, there are also clear reasons for disputing charges. ACH charges are not like credit card charges that can be disputed for any reason.

Consumers want to know their bank account information is safe during authorization, and your third-party ACH provider should have that covered. With CSG Forte, tokenization replaces all important data with a token that is generated randomly and has no intrinsic value. Our end-to-end encryption and compliance with financial regulations provide the trust and data protection you and your consumers are looking for.

Efficient

Online payments through the ACH network lend themselves to automation. Integrate your payments platform with financial management software to keep track of all money coming in and going out via ACH transfers. With the help of automation, your team can greatly reduce administrative responsibilities.

Additionally, eChecks or ACH payments are among the most common payment types used for recurring billing. Consumers can also enjoy the efficiency of money automatically taken from their accounts each month, reducing their payment responsibilities and eliminating late fees.

 

What Types of Businesses Can Use ACH Payment Processing?

Many types of businesses can benefit from ACH payment processing.

Small and Medium Businesses

Many small and mid-sized businesses understand the importance of offering convenient payment options for their customers. However, these businesses also have fewer resources than larger enterprises and wonder if they can afford the fees associated with e-payment processing.

ACH payments have relatively low fees compared to credit card processing and far less administrative overhead than processing checks. When you’re looking for convenient payment options at a reasonable price, ACH payments are the way to go.

Integrated Software Vendors

Integrated software vendors (ISVs) provide software as a service (SaaS) that depends on a subscription model. These businesses are ideal for ACH payments because recurring payments are simple to set up.

When ISVs collect payments from several sources in multiple formats, managing finances can be complex. These businesses also often operate with projected income rather than actual income, so staying organized and tracking the money coming in is essential. Online payments with ACH transfers unify payments from clients and make financial tracking easy.

Enterprises

Larger companies often have significant customer bases to match. With payments coming from many different sources, tracking earnings and reconciling payments can become complex. ACH payments provide the efficiency of automation, allowing enterprises to manage their incoming payment volume.

Government

Donors, constituents and more send money to government organizations. Whether an organization is municipal, state or federal, accepting payments from multiple sources can be challenging. With ACH transfers, organizations can securely house their payments under a single system while reducing administrative strain on internal teams.

 

How Can CSG Forte Help You?

CSG Forte offers a complete, end-to-end payments solution with Dex. Our platform allows you to seamlessly and securely accept transfers from your customers, empowering your business with payment flexibility and reduced administrative responsibilities. See what CSG Forte can do for you, and get started with us today.

How Long Does an ACH Transfer Take?

Automated Clearing House (ACH) transactions allow for electronic money transfers directly between banks. This funds transfer method is secure due to data protection measures. It is also convenient because it requires no cash or checks changing hands and takes only one to three days to complete. These advantages make ACH transfers appealing to businesses and individuals.

 

What Is an ACH Transfer?

ACH is an electronic funds transfer (EFT) method that involves moving money between banks without using cash or checks. During these transactions, money passes from one financial institution through the Automated Clearing House and ends in another bank. ACH technology has many uses, including direct deposits for payroll, online bill pay and digital payment services.

Here’s how an ACH transfer works:

  1. Authorization: Before making a payment or requesting money, you must contact the second party and ask permission to use this payment method to send funds.
  2. Payment details: After the second party agrees, your business can begin a transfer with a request to your bank.
  3. Batch processing: The request goes to your bank, which batches it with other transactions to send to the Clearing House or Federal Reserve at scheduled times during the day.
  4. Transaction submission: Those institutions receive the request, confirm that the account has sufficient funds to make the payment and send transactions five times daily.
  5. Money transfer: Funds move from the paying account to the receiving account.

This transfer method moves all funds electronically. The originating business can complete a transaction in two ways: ACH credit and debit. A credit means your business receives funds. Your company might use this for collecting payment for a service. A debit means you make a payment. Payroll is an example of how your business might use debits.

 

How Long Does an ACH Payment Take?

In general, ACH transfers take about one to three days to complete. ACH payment processing time may depend on the type of transaction, the policy of various financial institutions involved in the transfer and the time when your business submitted the request. Debit and credit transfers have differing requirements for processing speed:

  • ACH creditA transaction must be processed in two days when your business receives funds.
  • ACH debitA transaction must be processed in one day when your business sends funds.

Receiving depository financial institutions (RDFIs) can hold transactions to confirm funds which may take up to three days. If you need faster money transfer, you can use same-day ACH, which allows guaranteed transfer within one day as long as you submit the request during business hours. A request added after hours will transfer the next day.

Here’s an overview of each day of the money transfer process.

Day Zero

The process begins when you send your money transfer file to a bank. As long as your business sends the request before the last batch leaves, the request will move to the ACH network the same day.

Day One

The ACH network sends the transaction to a customer’s bank. It receives the file, debits or credits their account, and credits or debits the funds to the originating depository financial institution (ODFI).

Day Two

The payer’s bank must notify the ACH network of any failures within two days after payment submission. This day marks the payment failure cutoff.

Day Three

If the transaction fails, your bank will receive a notification from the ACH network and communicate it to you. Depending on the reason for failure, your business may initiate a new transaction or find a different method for paying or receiving funds.

 

How to Streamline ACH Transactions

Transfer times often vary due to factors outside your control, but you can do a few things to make transfers happen quicker and with fewer errors. These include:

  • Submitting files in the proper format: With an incorrect file, it may take some time for your bank to review the information, discover errors and contact you to resolve the issue.
  • Confirming customer payment details: Incorrect information leaves a challenging path for financial institutions to follow, while a transfer with correct details makes moving money easier.
  • Ensuring sufficient funds: For debit payments, check that your account has enough money to complete transfers. For credits, maintain open communication with customers to confirm they have the funds to pay you.

 

When Does the Receiver Collect Payment?

The receiver collects the payment within three days of submitting a transfer request. Factors that influence this timeline include:

  • Payment submission time: Payment leaves financial institutions in batches, so you must submit transactions before the last batch leaves for the day to increase your chances of fast processing.
  • Vendor transfer process: Differing originating and receiving financial institutions have varying rules and transfer processes—some might prioritize security over speed, leading to a slower funds transfer process.
  • Errors found in payment: An incorrectly entered account number or another similar error might mean your business must resubmit the transaction, and the receiver will wait longer for payment.

 

How Same-Day ACH Reduces the Wait

While ACH saves time compared to physical money like cash or checks, other digital transfer methods sometimes have shorter timelines. To solve the problem, financial institutions have worked together to create batch processing. With batch processing, your money will move within the same day as long as the initiating party submits the request by 4:45 p.m. EST.

Same-day ACH works because organizations like Nacha, ODFIs and payment processors have worked together to improve processing speeds. Any credit, debit or return transactions will process the same day when your business chooses same-day ACH.

The transaction limit for same-day ACH has also raised to $1 million, meaning your business can now make more significant payments with shorter wait times. Your business can optimize cash flow and keep money moving so your company, employees and customers gain access to the necessary funds in a timely manner.

 

Manage ACH Payments With CSG Forte

ACH payments make moving money more convenient by offering a digital method for transferring funds within days. With CSG Forte’s payment processing platform, your business can leverage ACH payments to make money management easier and faster. A network of over 20 banks means your business can send and receive money seamlessly. Get started with CSG Forte online to make payment processing better than ever.