Tag: ACH processing

What Are ACH Debits? ACH Debit Transactions Explained

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Like many activities, financial transactions have gone digital. These electronic transactions occur primarily through an affiliated financial institution network called the Automated Clearing House (ACH) Network. This system helps move money between parties’ financial institutions simply, quickly and cost-effectively.

Nacha is that governing body that oversees the network and its transaction processing, which totals billions of dollars processed every year. Nacha establishes the rules and procedures for submitting and processing ACH debit and credit requests — the two main transaction categories. In 2020 CSG Forte was named a Preferred Partner for Government Agency ACH Payment Gateways by Nacha. This is a designation given based on leadership and innovation in advancing the ACH network.

 

What Is an ACH Debit?

An ACH electronic debit is a transaction withdrawing money from an account electronically. ACH debits can pull funds from checking and savings accounts, though restrictions on debits may apply to some business accounts.

 

Identification Requirements

Whether the transaction classifies as an ACH debit depends on which party originates the request.

For each debit, there’s a corresponding ACH credit — funds received by the other party to the transaction. When you authorize a company or individual to withdraw funds from your account electronically, they initiate the request with the network. These qualify as ACH debits since they’re pulling money from — debiting — your account. The funds’ ultimate deposit into their account represents the transaction’s ACH credit portion.

 

ACH Debit Payment Timing

While ACH debit payments and credits are swift, they’re not instantaneous. NACHA aggregates transactions and processes them in batches. Batches execute five times daily to facilitate efficient money transfers.

 

Advantages of ACH Debits

ACH debits for business have numerous advantages, including:

  • Cost control: ACH debit processing is generally more affordable than handling physical checks or even credit or debit card transactions.
  • Better risk mitigation: Since fewer people are involved in processing, there’s less fraud and error risk.
  • Faster payment collection: ACH debits provide cash flow sooner than traditional check processing.
  • Improved recordkeeping: Completing payments with ACH debits creates electronic traces for easier tracking, reporting and reconciliation.
  • Environmental friendliness: ACH debits reduce the need for paper checks and mail trucks that consume resources.
  • Reversibility: ACH debits can be reversed when errors occur, unlike wire transfers, which are generally challenging to recapture.

 

ACH Debit Challenges

ACH debits can also pose some unique challenges, such as:

  • Financial institution restrictions: Some account holders restrict ACH debits to transactional, daily, weekly or monthly limits.
  • Limited funds availability insight: The ACH network doesn’t support immediate feedback on errors or guarantee funds availability.
  • Real-time execution: The ACH network doesn’t provide instant credits, though it can significantly reduce processing time versus physical checks.

 

How Do ACH Debits Work?

ACH debits follow a prescribed three-step process:

1. The payee initiates the request: The recipient submits a message to their account holder, called the originating depository financial institution (ODFI), requesting it to debit the payer’s account using:

  • The bank routing and account numbers of the account to debit.
  • The transaction amount.
  • The Standard Entry Class (SEC) code.
  • A proposed transaction settlement date.

The ODFI then enters the request on the ACH network.

2. The payer’s account holder receives the request: At regular intervals each business day, the ACH network passes these withdrawal requests to the payer’s account holder, the Receiving Depository Financial Institution (RDFI). The network bundles demand by institution, so the RFDI will get multiple debit requests with each “drop.” The RDFI investigates the requests and transmits any error messages or rejections to the ACH network.

3. The transaction settles: As long as there are no errors or rejections before the proposed settlement time, the ODFI and RDFI will transfer balances between each other through their respective Federal Reserve accounts. Once the ODFI receives the funds, it credits the payee’s account to finalize the transaction.

 

Main Types of ACH Electronic Debits

There are two primary categories of ACH debit transactions — recurring payments and one-time authorizations — before the activities receive additional standardized coding.

Recurring Payments: Establishing an automatic payment with a company gives it recurring authorization to initiate an ACH debit from your account information. For example, many consumers sign up for automatic payments on their wireless bills or streaming services. As the bill comes due each month, the provider uses the agreement to request the funds to satisfy the amount owed. This convenience ensures people don’t forget to pay and prevents late fees or service disruptions.

On-Demand ACH Transactions: One-time authorizations allow a receiving party to request the monies for a single transaction. They are also called on-demand ACH debits because they don’t represent an ongoing arrangement. An example is a consumer agreeing to an ACH electronic debit from their account for a tax payment or individual purchase. Under this ACH debit type, consumers generally retain more control over when a business can electronically withdraw funds.

Standard Entry Class Identification: The ACH network recognizes numerous debit types beyond recurring and on-demand. Initiators can use a three-character SEC code to identify the precise type.

  • Accounts receivable entry (ARC): This code represents converting checks from payment drop boxes or mail into one-time authorization to debit the payer’s account electronically.
  • Back-office conversion (BOC): BOC transactions use a check presented in person to initiate an ACH debit after acceptance.
  • Machine transfer entry (MTE): This code applies to automated teller machine (ATM) withdrawals to debit a bank account for the funds withdrawn from the machine.
  • Point-of-purchase transaction (POP): Unlike BOC check conversions, POP transactions use physical checks immediately upon receipt and return the paper check to the presenter once the system accepts the debit.
  • Point-of-sale entries (POS): POS transactions may be the most common, as they use your debit card to withdraw the corresponding funds from your account.
  • Prearranged payment and deposit (PPD): Recipients use this code to originate recurring and automatic payments.
  • Shared network entry (SHR): Much like the MTE, the SHR code settles ATM withdrawals for machines within the same network.
  • Telephone-originated request (TEL): This SEC identifier applies to payment authorizations received in phone interactions.
  • Web-initiated transaction (WEB): As its name suggests, WEB is reserved for ACH debits agreed upon through internet activity.

 

ACH Debit vs. ACH Credit

ACH credits differ slightly from ACH bank debits, though they generally represent two sides of the same transaction.

A transaction qualifies as an ACH credit when an account holder electronically sends money to another’s account, typically at a different financial institution. Since they’re depositing funds rather than withdrawing them, this action is also called a “push.”

The ODFI will enter the request with ACH, which passes the crediting information onto the RDFI. Settlements occur the same way as with ACH debit — as long as the information reconciles correctly, the RDFI accepts the funds and credits the recipient’s account.

Direct deposits, electronic refunds and peer-to-peer payments are all ACH credit transaction examples.

 

EChecks vs. ACH Debit

eChecks — short for electronic checks — can represent an ACH debit, but the term isn’t definitive. While eCheck can describe any portion of the digital money exchange, ACH debit applies specifically to cases where the recipient initiates the payment request.

Another key difference is whether the money transfers via ACH. eChecks can be used to support a wire transfer that occurs outside the ACH network. Almost all physical checks go through some electronic processing, but not all result in ACH debit and credit transactions.

 

Choose CSG Forte as Your ACH Debit Solution

As an experienced NACHA Preferred Partner for payment solutions, CSG Forte leverages scalable, easy-to-use technology to simplify and streamline online payment collection.

Contact us to request a personalized quote, or apply for your account today.

eCheck vs. ACH What Is the Difference?

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Many terms exist to describe different types of automatic payments, and it can be hard to understand what they all mean. At a high level, the broadest category is electronic funds transfer (EFT). Automated Clearing House (ACH) payments and electronic checks, or eChecks, are two examples that fit under the EFT designation. The terms eChecks and ACH payments are often used interchangeably; however, they have distinct differences. ACH transactions include various forms such as payroll and interest, while eChecks refer only to electronic transactions completed between checking accounts.

 

What Is an Electronic Check, or eCheck?

An eCheck is a type of EFT that involves transferring money between two checking accounts. This payment method goes by several other names, including electronic check, direct debit and internet check. Many businesses incorporate eChecks into their systems to accept large amounts of money. Companies that operate solely online also benefit from eChecks because they offer customers an additional payment option for transferring funds.

eChecks function much like paper checks, but have an advantage because they do not become outdated. They also process faster because they skip the manual deposit process of sending a check and waiting to bring it to a bank. Typically, eChecks process in 24 to 48 hours. Customers also get more security through eChecks than they would with traditional payment methods, making them an appealing option for those sending and receiving funds.

It’s important to note that a business must work with a processing company to use electronic check ACH transfers. eChecks require particular software for safe and effective use.

 

How Do eChecks Work?

Unlike when a business uses a regular paper check, making an eCheck payment doesn’t require writing or printing information onto a piece of paper. Instead, the payer enters all information electronically, transferring funds from one account to the other without a traditional paper trail. Typically, the payee will send an online form. Customers then enter their checking account information and the amount paid. Payees can also accept eChecks over the phone with recorded phone calls. This process can save time and reduce paper use, reducing effects on the environment.

Another important note is that merchants must pay a small fee to process eChecks. The price is minimal and often worth the cost due to the added convenience and savings gained by not having to print and mail paper checks.

Other potential benefits for businesses when accepting eChecks include:

  • Convenience: Depositing checks at the bank can be time-consuming for customers and businesses. eChecks make it easier to facilitate transactions without requiring extensive work for administrative staff. Additionally, eChecks often clear much faster than traditional checks, allowing businesses to access funds quickly.
  • Cost-effectiveness: eChecks generally have lower transaction fees compared to credit card payments, making them ideal for large transactions. Due to several features implemented by the ACH network, customers who use eChecks may also be less likely to initiate chargebacks compared to transactions with credit card companies. Fewer chargebacks can help businesses avoid potential lost revenue.
  • Improved cash management: Fewer administrative obstacles and faster processing times contribute to better insights into funds, particularly for businesses with tight operating margins. Quicker access to funds can help facilitate better decision-making about expenses.
  • Increased customer satisfaction: Businesses that offer multiple forms of payment can access a broader range of customer preferences. Accepting eChecks can make businesses more appealing to customers looking for flexibility and ease of payment.

 

How Are eChecks Processed?

Businesses desiring to implement eCheck processing may want a more in-depth look at how the process works. Here’s a step-by-step explanation:

  1. Reach out for authorization: All ACH payments, including eChecks, require approval from both parties by sending a signed order form, speaking on the phone or filling out an electronic form.
  2. Enter payment information online: To begin processing information, you must enter customer information, including the bank’s routing number, account number, name, address and federal tax identification number.
  3. Confirm and submit: After filling out all necessary fields, your business should ensure all information is correct and confirm submission through the software or payment gateway.
  4. Initiate transfer: Submitting the payment details to the ACH network triggers the transfer of funds and coordinates with the bank for verification and movement of money.
  5. Bank verification: Once the payer’s bank receives the account information and confirms the availability of funds, it will approve the transaction for processing.
  6. Process payment: Once you submit a payment and the transaction is approved, the payer’s account will automatically withdraw the amount within three to five days.
  7. Receive confirmation: When the transaction is complete, both parties generally receive confirmation receipts that show the check amount and other details.
  8. Recordkeeping: The electronic process means the parties receive electronic records, which are often easier to manage and retrieve for accounting or auditing purposes.
  9. Settlement: The process is officially complete once the ACH settles the transaction with both banks.

 

What Is ACH Processing?

eChecks are a type of ACH payment, but not the only kind that exists. Broadly, ACH refers to the Automated Clearing House, a federal EFT system run by the National Automated Clearing House Association, or Nacha. The network moves money directly between banks for ease and security in transferring money. Consumers, businesses and governments use this funds transfer method.

ACH processing has two main categories—credits and debits—so you can send money to customers or request that customers pay you. Here are a few primary uses for ACH transactions:

  • Refunds (including taxes)
  • Interest payments
  • Government benefits
  • Payroll
  • Employee expense reimbursement
  • Mortgages
  • Financing
  • Direct deposits

ACH payments offer a range of advantages over other payment methods, including:

  • Low transaction costs: ACH payments charge a per-transaction fee, no matter the payment amount, which is significantly more affordable compared to some traditional payment methods like credit cards, wire transfers, checks or cash.
  • Secure payments: ACH processing provides secure payments by facilitating direct transactions between the payer and payee without any interference from a third party. This process can help reduce the chances of fraud or payment errors like misused credit card information, cash theft or bounced checks.
  • Repeatable and reversible transactions: Some electronic payment methods require customer bank account information at each transaction. ACH offers recurring payments and automated transactions for customers and businesses, helping to reduce missed payments, save time and keep private information secure. ACH payments are also reversible, which can reduce the risk of fraud.

 

How Does ACH Processing Work?

The ACH network connects thousands of banks and other financial institutions across the United States. When a business or individual pays or requests payment, the request gets batched with other transactions. Here’s an example of the process for ACH direct payment:

  1. Receive authorization: Before your business can bill a customer, you must receive permission through an authorization form that allows you to pull money from the customer’s bank account.
  2. Information collection: Your business must provide details about the transaction to your bank, including routing numbers, bank account information and transaction type. The depository institution in the ACH network is known as the originating depository financial institution (ODFI).
  3. Collecting and batching: The ODFI collects all transaction files and forwards them to be processed. During processing, the Federal Reserve or a clearinghouse receives the batch of transactions.
  4. Receiving and distribution: The institution sorts them to determine which bank the payment must come from, and which bank receives it, which is known as the receiving depository financial institution, or RDFI\. The recipient’s bank account gets the transaction and reconciles both accounts, which completes the transfer process.

 

EChecks vs. ACH: Breaking Down the Differences

eChecks are a specialized form of ACH transaction, so these two electronic payment types have many similarities. Both are processed electronically, use the same network for processing and require authorization before making or receiving a transfer. They also have the same transaction limit.

Though eChecks and ACH have many similarities, comparing electronic checks vs. ACH brings out a few differences, including:

  • Payment time: Both electronic transfer types take about four business days to process. However, those receiving eChecks may at times wait up to five days to receive the money.
  • Technology used: eChecks were not available when the ACH was first created. This payment type was added to the system after new technology was developed and requires using an eCheck service.
  • Payment uses: eChecks are more specialized than ACH transactions, usually for one-time expenses. This means the banking information is not stored once the transaction is complete. ACH covers recurring costs that occur on a schedule and stores the payment information for future deductions.

Cost per transaction: ACH and eCheck transactions typically charge fees based on a percentage of the total transaction, but the fees charged for eChecks are often much lower. ACH payments may present chargeback, reversal or return fees in some cases. Both payment types have lower costs to process than credit card transactions.

 

 

Choosing Between ACH and eChecks

ACH payments and eChecks offer affordability, speed and security, making them appealing money movement options for merchants and customers. You can refer to the difference between eCheck and ACH payment types to decide which is best for your business’ needs.

For example, a recurring expense like payroll is better handled through ACH than an eCheck. Payments from customers to your business might work better with an eCheck. Companies that see benefits in both types of transactions can often get them together since they use the same system.

 

 

Why Choose CSG Forte for eCheck and ACH Processing?

eChecks are a secure, fast and convenient way to receive payment from customers, but you need a processor that accepts this payment type. CSG Forte offers a payments platform that accepts eChecks, ACH transactions and credit and debit cards on a single platform. Our system integrates with existing ones and can be customized to meet changing business needs.

Contact one of our payment experts to learn more about how our complete payments solution can benefit you. You can also explore ways to get started with our solutions.

What Are ACH Credits and How Do They Work?

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Do you compensate your employees through direct deposit? Have you paid your bills online? If so, you have sent ACH credit. The Automated Clearing House (ACH) is a critical network in the United States financial industry that manages millions of transactions like these every day.

ACH credit makes electronic money transfers possible, so many systems and apps use this infrastructure for digital payments. You can benefit from fast, simple and secure payments when your business uses ACH payment solutions.

Read on to understand the meaning of an ACH credit and how it can boost your business.

 

What Does ACH Credit Mean?

An ACH credit is an electronic payment that sends money from one account to another. The payer (the person sending the payment) makes the request to push funds from the originating bank account (the payer’s account) to the recipient (the person receiving the payment) by putting the funds in the deposit account (the recipient’s account).

This method requires only a few basic transaction details, including the payer’s and recipient’s:

  • Name
  • Bank account number
  • Bank routing number

In just a few hours or days, the transaction is completed, and the recipient has the funds in their account.

ACH credits occur through ACH, an electronic money network connecting every major financial institution in the country, including credit unions, banks and the Federal Reserve. With this network, people and businesses can facilitate payments between accounts regardless of the banking institution. The National Automated Clearing House Association (Nacha) manages the ACH network and ensures payment is safely and quickly transferred. While this network mainly transfers money within the U.S., it can be used for international transfers.

 

How Does ACH Credit Work?

ACH credits are essentially a digital form of paper checks. With a paper check, the payer would fill out a check for the recipient to take to their bank. With credit ACH, the details are recorded and the funds are transferred electronically.

Here is how ACH electronic credits work:

  1. The payer initiates the payment: The payer provides the originating bank—or the Originating Depository Financial Institution (ODFI)—with the recipient’s account number and routing number, the amount of money to transfer, and a target settlement date (the date to transfer the money).
  2. The ODFI sends the payment details to ACH: The ODFI or their approved processing partner starts the transfer by sending the request to the ACH network. These institutions may batch several transactions to send to ACH in bulk.
  3. ACH sends the details to the recipient’s bank: The ACH network receives incoming transfer details in bulk and breaks them down into individual transactions. They bundle the transactions into batches and send the batch to the depositing bank—or the Receiving Depository Financial Institution (RDFI). ACH completes this process five times per business day.
  4. The RDFI processes the transaction: The RDFI receives the ACH bundles in their system and executes the transaction based on the processing window. Any transactions with incorrect information will trigger an error code, and the RDFI sends error codes back to ACH.
  5. The ODFI and RDFI settle the transaction: If the transaction has the correct details, the ODFI and RDFI settle the payment using their Federal Reserve balances.
  6. The recipient receives the payment: The RDFI releases the ODFI funds to the deposit bank account.

This process typically takes two business days, but it can be completed in one day if the ODFI pays a fee for same-day processing.

 

What Are Examples of ACH Credit?

Many individuals and businesses use ACH credit every day without realizing it. Any payment involving an account number and routing number to transfer money counts as an ACH transfer.

The most common examples of ACH credits include:

  • Online purchases: For merchants that do not accept credit card payments online, consumers can use an ACH transfer to pay the store for their order.
  • Refunded purchases: When merchants need to refund a consumer for a returned product, they can push money from their account to the consumer’s account. This transaction is an ACH credit.
  • Government benefits: The U.S. government uses ACH credit to send money from its accounts to qualified recipients for stimulus payments and similar transactions.
  • Direct deposit: When employers send payroll to employees through direct deposits, these transfers are a type of ACH credit. Funds in the employer’s account are pushed to their employees’ bank accounts.
  • Bill payments: Many companies allow customers to pay their bill online. Customers can provide their account and routing numbers to transfer funds from their account to the business to settle the bill.
  • Peer-to-peer payments: Payment apps like Venmo and PayPal allow people to send money to another person. This transaction is an ACH credit payment. While an ACH credit transaction is free, fees may be incurred depending on the bank used. If the ODFI or RDFI uses a processing partner, the partner may charge additional fees. The bank itself may charge a fee per transaction. The fee for an ACH credit transaction can range from tens of cents to a couple dollars.

Factors that impact ACH credit fees include:

  • The number of transactions processed per month
  • The monetary amount of transactions
  • The likelihood the transaction will be returned
  • If the transaction requires same-day processing
  • Which account validation method will be used

Since these fees operate on a scale, businesses will see reduced costs per transaction the more transactions they have.

 

What Benefits Do ACH Credits Offer Your Business?

Compared to traditional payment methods, ACH processing is quicker, easier and more secure. ACH transactions offer many advantages, including:

  • Simple setup: ACH credit requires the payer’s and recipient’s bank account number and routing number. By requiring only a few details, your business can easily set up one-time or recurring payments. Because these numbers change infrequently, if ever, you can count on your payments to go through.
  • Minimal to no transaction fees: Compared to wire transfers and credit cards, ACH credit fees are much lower, if there is a fee at all. This cost-effective fee pricing leads to monetary savings for your company.
  • Fast payments: ACH credit is one of the most efficient payment methods available. You can pay your employees and bills right away without manual processing. Funds move quickly between banks and are available in the deposit account as soon as the transaction is finalized.
  • Enhanced security: Credit ACH transactions have many security measures to ensure the funds are safe between the originating and deposit accounts. For example, bank account verification requires the payer and recipient to prove their bank account numbers, and fraud detection verifies the parties’ identities.
  • Accessible payment records: You can review electronic records of your transactions in your ACH processing platform at any time.

 

Choose CSG Forte for Your ACH Solutions

Your company can process ACH payments from any device, bank or source with validate services from CSG Forte. We offer two solutions—Validate and Validate+—to process and report your payments while reducing manual errors and identifying bad checks before processing. Your business can also validate online transactions for fraud, keeping you compliant with Nacha.

Contact us for more information about Validate and Validate+ or sign up today for your payment processing solution.

Going Digital: Understanding Merchant Services Providers

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Cash has long been king, but its reign is quickly winding down.

Customers today increasingly prefer a modernized, digital payment experience for several reasons: ease of transfer, remote purchase capabilities and security, to name a few.

If your business doesn’t already accept credit cards, debit cards and other electronic payments, you’ll want to rethink that strategy before falling further behind—digital transactions accounted for 30% of all point-of-sale (POS) transactions and 50% of all online sales in 2023, and those shares are only expected to increase.

To get your company online, able to accept digital payments, you’ll need to partner with a merchant services provider (MSP). And, especially if you’re new to the online payments world, with all its regulations, compliance requirements and data protection laws, you’ll need to make sure and choose the right payments partner.

 

What Is a Merchant Services Provider?

A merchant services provider is a go-between company that acts as a mediator between your business and credit card companies and/or banks. If your company wants to accept multiple forms of payment beyond cash, it needs to work with a partner that offers secure merchant services.

The goal of most MSPs is to facilitate and secure the payment process for companies and their customers. Along with acting as the intermediary between banks and your company, an MSP may also allow you to connect your online and physical stores’ payment systems, ensure you stay compliant with security regulations and offer customer support.

Depending on your needs, your MSP may provide services such as payment processing, payment gateways, POS devices and merchant accounts.

 

Merchant Account Provider vs. Payment Gateway

Payment gateways and merchant account providers fall under the merchant services provider umbrella. In some cases, an MSP may provide both payment gateway and merchant account services.

Merchant account provider: Your company will need a merchant account to accept credit and debit cards. The merchant account provider holds funds for you while bank authorization occurs. Once the authorization is complete, the money is transferred from the merchant account to your bank account.

A merchant account isn’t the same as a typical bank account. While the money in the account technically belongs to your business (provided the credit or debit card company approves the transaction), you can’t directly access the money and withdraw it as you would funds in your savings or checking account.

Instead, you must rely on the account provider to transfer the money from the merchant account to your business bank account. The merchant account provider subtracts any fees related to the transactions from the balance before transferring the funds to your bank.

You need to have a merchant account before you can accept credit and debit cards. Some merchant account providers also offer payment processing services and products such as card readers, point-of-sale systems and mobile payments.

Payment gateway: This merchant service allows your company to process credit and debit cards, as well as other types of electronic payments. Online shopping, in-store shopping and paying with a credit or debit card in-store wouldn’t be possible without payment gateways.

Payment gateways provide software that transfers data about a transaction between parties. When customers provide their credit card information online, that information travels along the payment gateway to the issuing and acquiring banks. The payment gateway encrypts the card information, protecting it from third-party interception.

 

How Does a Merchant Services Provider Work?

As the go-between for a business and a bank, the merchant services provider facilitates payment transactions. While a lot goes on behind the scenes when a customer makes an electronic payment, the process itself typically lasts just a few seconds. A merchant services provider goes to work once a customer provides payment information:

  1. The MSP sends the payment information to the acquiring bank.
  2. The acquiring bank passes on the payment details to the issuing bank to get authentication and approval.
  3. The issuing bank either approves or denies the payment.
  4. The approval or denial gets sent to the acquiring bank, which sends the information to the MSP.
  5. If the payment is approved, the merchant account receives approval and confirmation of the transaction.
  6. The money is transferred from the customer’s bank account or credit card to the merchant account.

 

Merchant Services Pricing

Several pricing models are available for merchant services. The exact pricing structure can vary based on your agreement with your MSP and based on the volume of your transactions, historical risk and claims in your sector and specifics of your operation.

 

How Quickly Can You Get Started With a Merchant Services Provider?

If you’re ready to work with an MSP, the first step is to gather the information the provider will need to review your company and confirm you’re eligible to receive its service. Providing as much information as possible on your application helps streamline the process, meaning you can start more quickly.

Some of the documents you’ll want to include with your MSP application are:

  • Your business tax ID
  • Your website
  • Your mailing address
  • Your business’s bank account information

 

What Types of Businesses Can CSG Forte Help?

If your business wants to accept more forms of payment, the team at CSG Forte can help. We offer merchant services for small- and medium-sized businesses. We’ll help your company accept electronic payments, including credit and debit cards, in-person payments, online payments and over-the-phone payments. You’ll get peace of mind that your transactions are secure, and your customers’ payment data is safe. If you have any issues with our merchant or payment processing services, our customer service representatives will assist. We help you with troubleshooting issues and provide tools to support you with customer disputes.

 

FAQs

Have questions about working with a merchant services provider? Check out our answers to some of the most frequently asked questions.

Do I Need a Merchant Services Provider?

If your business wants to accept credit and debit cards or other forms of electronic payments, you’ll need to work with a merchant services provider. While you’ll need an MSP, the type of MSP your business requires can vary depending on the services and the type of payments you want to accept.

What’s the Difference Between a Merchant Services Provider and Merchant Account Provider?

A merchant account provider is a type of merchant services provider. A merchant account provider can give your company access to a merchant account. Some merchant account providers also handle payment processing, but not all do.

What’s the Difference Between a Payment Service Provider and Merchant Account Provider?

A merchant account provider gives your company access to its own merchant account. Payment service providers can also provide access to a merchant account, but the account won’t exclusively belong to your business. Instead, a payment service provider groups businesses together and uses the same merchant account for them. Working with either a payment service provider or merchant account provider allows your company to accept electronic payments, although it typically takes longer to receive an account from a merchant account provider than to be approved by a payment service provider.

How Can I Know My Payment Platform Is Secure?

Security is critical. Customers want to feel confident their payment information is safe from hackers, and companies want to know that the MSPs they work with prioritize security. To ensure payment security, all payment details should be encrypted during transmission and when the system is at rest. Fraud management tools are also important, and the MSP should comply with all industry standards.

How Do I Choose a Merchant Services Provider?

Choosing an MSP can be a straightforward process. You need to assess your organization’s needs and determine which types of payments you wish to accept, then do your research and look for a provider that fits your needs. Also, consider how you want to accept payments, such as online, in person or over the phone. Pay attention to the security measures the provider has put in place, the fee schedule and the amount of customer support the MSP provides. It is useful to look for an MSP that can integrate with your existing systems or provide ample support to help you migrate over.

 

Choose CSG Forte for Merchant Services

Take the steps toward achieving a simpler payment process by choosing CSG Forte as your merchant services provider. Contact us today to start your application or learn more.

What Is ACH Prefunding?

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Automated Clearing House (ACH) transactions are booming. In 2024 alone, the ACH network transferred 8.6 billion commercial and government direct deposit payments (totaling $15.8 trillion) for things like payroll, retirement distributions, Social Security and tax refunds. Imagine what would happen if the money wasn’t there to back those payments. Banks, who are ultimately on the hook, would be in hot water.

That’s where ACH prefunding comes in. Prefunding ACH transactions guarantees there’s enough money in the payer’s account before the payments are approved—reducing the credit risk and keeping the system running smoothly.

Keep reading to learn how ACH prefunding works and why it matters for banks, businesses and payees.

 

What Is ACH Prefunding?

ACH transactions refer to the electronic transfer of money between bank accounts. ACH transactions move funds electronically through the ACH network to cover a range of payments, such as direct deposit of paychecks, recurring bill payments and online purchases.

ACH pre-funding is a financial practice used primarily when processing ACH credit payments (when money is “pushed” from one bank account to another through the ACH network). To prefund ACH transactions, the financial institution debits the funds from the originator’s (the party sending the money) account in advance, guaranteeing sufficient funds are available to cover the outgoing payments.

 

How ACH Prefunding Works:

  1. Initiation of ACH credit transaction: A company, agency or individual (the originator) initiates an ACH credit transaction to send funds to another party. This could be for payroll, vendor payments, Social Security payments or other large disbursements. The payer or the payer’s processing partner provides an originating depository financial institution (ODFI) with the payee’s account information, the amount to be sent, a categorization code and a target settlement date.
  2. Funds verification: The ODFI verifies that the originator’s account has enough funds to cover the total amount of the ACH credit transaction.
  3. Prefunding process: Instead of immediately sending the ACH transaction, the ODFI prefunds the transaction. This means:
    1. The ODFI debits the originator’s account for the total amount of the ACH credit transaction—usually one or two days before the effective date of the ACH transaction (when the funds are intended to be available to the recipient).
    2. The funds are then held in the ODFI’s settlement account until the credit file is released by the ODFI.
  4. Settlement: On the effective date, the ACH network processes the transaction, transferring the funds to the receiving depository financial institution (RDFI), which then credits the recipient’s account.

 

What Are the Benefits of ACH Prefunding?

ACH pre-funding is a safety measure that adds a step in the ACH credit process to guarantee the availability of funds by debiting funds from the originator’s account prior to releasing ACH credits.  Prefunding ACH transactions decreases the bank’s credit risk associated with ACH origination by reducing the risk of the originator’s account having insufficient funds at the time of ACH prefunding settlement. If the originator doesn’t have sufficient funds in its bank account on the effective date, the ODFI is responsible for those transactions.

Prefunding ACH transactions offers several other advantages for financial institutions, businesses and recipients:

  • Guaranteed settlement: Funds are verified and secured before processing, eliminating the risk of rejected payments due to insufficient balances.
  • Lower return rates: Prefunding guarantees that the originator (sender) has the necessary liquidity, reducing ACH returns.
  • Faster settlement times: Prefunding ACH transactions supports smooth and timely settlement. Prefunded ACH credits often qualify for same-day or next-day availability of funds.
  • Better cash flow predictability: Businesses can accurately forecast outgoing payments without surprises.
  • Improved vendor and payee trust: Employees, suppliers and contractors get paid on time, strengthening business relationships.

 

What Are the ACH Originator’s Responsibilities?

In the ACH payment process, the originator is the individual, business or entity that initiates the ACH transaction. Originators have several responsibilities within the ACH process, including:

  • Authorizations: Obtain the proper authorizations from the transaction recipient to originate one or more entries to the recipient’s account. Provide authorization to the bank within a specified time, if requested to do so. Retain proper authorizations for at least two years following the termination of the authorization.
  • Security: Protect the recipient’s banking information. Protect sensitive financial data, including employees’ identities and credentials.
  • Account updates: Make necessary changes to the payee’s account information within a specified time frame or prior to the next origination, when notified.
  • Transactions: Send ACH entries on the correct date and cease entries when notified. Notify the recipient regarding changes in transaction amounts or dates. Prefunding ACH transactions minimizes changes in transaction dates.

 

What Happens if Prefunding Fails?

If the originator’s account doesn’t have sufficient funds for the ACH credit payment during prefunding, the bank sends a notification indicating the ACH transaction failed funding attempts. This notification will also indicate a specific date/time by which the originator must fund the account. If funding doesn’t occur before the cutoff, the ACH payment will fail and the originator must reinitiate the payment. If sufficient collected funds are still not available before processing begins on the evening before the file settlement date, the file may not be processed.

 

How to Reduce ACH Fraud Risk

ACH credits are becoming a prime target for business email compromise (BEC), a scam where fraudsters posing as executives or (more commonly) vendors send emails to trick employees into making unauthorized payments. According to the 2025 Association for Financial Professionals’ Payments Fraud and Control Survey Report, 63% of respondents cited BEC as the number one avenue for attempted and actual payments fraud, with ACH credits the second most vulnerable payment target (reported by 50% of respondents, behind wire transfers at 63%).

While ACH prefunding doesn’t prevent fraudulent transactions (it just makes sure the money is available for transfer), originators and financial institutions can take these steps to reduce ACH fraud risk:

  • Perform an internal risk assessment and controls evaluation: What types of controls are in place to combat ACH origination fraud?
  • Strengthen identify verification before sending payments: Know to whom the money is going before sending payments.
  • Implement security measures: It’s imperative that you protect employees’ computers and credentials.
    • Regularly update firewalls and anti-virus, anti-malware and anti-spam protections.
    • Protect and keep confidential all user IDs, passwords and authentication methods.
  • Send alerts: Do this when an employee’s password has been changed, or when an ACH credit transaction has been generated.
  • Monitor accounts online daily: Review the balances and account transactions so you are aware of all ACH transactions, even when they have not yet posted to your account. Early detection of fraud is critical to minimize the damage.
  • Use dual-approval procedures: One bank employee generates the ACH batch and a second employee logs in and approves the batch.

 

Send and Receive ACH Secure, Reliable Payments With CSG Forte

CSG Forte makes it simple to disburse funds and collect payments instantly and reliably via ACH transfer. You can make payments to a supplier, to your employees or as a refund to a consumer just as easily as you accept customer payments.

CSG Forte supports same-day payment options to make ACH transfers even more convenient. Our payment platform protects financial data and provides payment confirmation, offering account status validation and account ownership solution, as well. These features reassure users that payments reached the right recipient.

With CSG Forte, it’s easy to accept—and make—digital payments. Ready to get started?  Contact us today.

Debunking ACH Payment Myths: What You Should Know

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What’s the most valuable non-cash payment channel in the United States? Most people would say credit cards—and most people would be wrong. It turns out  Automated Clearing House (ACH) payments are the most valuable non-cash payment channel. Even though more credit and debit card than ACH payments are transacted each year, ACH payments are worth much more on average.

While debit cards account for 81% of non-cash payments, ACH payments totaled $86.2 trillion in 2024. So, why don’t ACH payments get the (ahem) credit they deserve? Despite existing for half a century, there are still some persistent ACH myths. These include ACH payments taking too long or being too hard to set up.

Here, we’ll explore three popular misconceptions about ACH and explain both why they persist and the truth about ACH processing.

Let’s dig into each of these myths in more detail.

 

ACH Myth 1: ACH Payments Aren’t Viable for One-Time Payments

Consumers don’t know what ACH is, but they know how it affects their lives. It’s often how they receive their paychecks (via direct deposit) or how they make recurring utilities or government payments.

Businesses are much more familiar with ACH payments, which can be made over credit or debit. But what they may not be aware of is how to use ACH for one-time payments—and how it can save them money. Given that bank account information is saved and high fees can add up over repeated transactions, the appeal of ACH for recurring payments is clear.

Consider large transactions worth hundreds of thousands of dollars or more. No one wants to pay a 2.5% processing fee when that amount climbs to five figures. If businesses choose to use ACH processing on the backend, that means lower fees for the end customer.

Whether for real estate purchases, medical billing, bulk supply orders, or other large purchases, the fee difference between ACH and other types of payment processing can be sufficient reason even if it is only once.

Myth: Busted

ACH payments are viable for both recurring and one-time payments, especially when dealing with large transactions.

 

ACH Myth 2: Customers Don’t Want to Connect to Their Bank Accounts

You may have heard that most consumers are unwilling to enter bank account information and prefer to provide their credit card. This may be true for some, but given the growing adoption of digital wallets, making payments online can be much less work than writing a paper check. Instead of having to track and write out specific information each time, customers can choose a saved account to make a payment from.

While storing bank data can be a concern, more of your customers have their bank account information available than ever before. From a payee perspective, this simply looks like an automatic withdrawal from their account. When you choose to use ACH for your payment processing, you can benefit from the cost benefit of ACH processing without causing extra hassle for your customers. But convenience isn’t the only factor at play.

Even though consumers have become accustomed to processing and convenience fees, everyone likes saving money. When using ACH to power your payments, you can make transactions more profitable without passing the hidden fees associated with credit card payments onto them.

According to Jeff Kump, Head of Payments at CSG Forte, “We’ve heard from a number of clients that customers were happy to link their bank accounts, especially when it let them save money on fees for big purchases.”

Myth: Busted

Customers are happy to connect their bank accounts for ACH payments, even when the benefits are hidden in the backend.

 

ACH Myth 3: ACH Payments Always Take Between Three and Five Days to Process

ACH payments have a reputation for taking several days to process. Depending on the vendor, that can sometimes be the case, but it doesn’t have to be.

While many ACH processors do offer overnight and multi-day ACH processing, they can also process payments on the day they were made. According to Nacha, the organization that oversees all ACH payments, there were more than 1.2 billion same-day ACH transactions processed in 2024.

To account for the growing volumes and values, Nacha in 2022 increased the same-day ACH payment limit to $1 million. It seems likely that this trend will continue as the security and ease of same-day ACH payments are proven time and again.

Despite the convenience, only one vendor (CSG Forte) offers in-house same-day ACH capabilities. This isn’t to say that no other vendor offers same-day ACH capabilities, but only CSG Forte builds, maintains, and delivers this capability within the same organization.

Myth: Busted

While some ACH payments can still take several days, including those over $1 million or processed by certain vendors, it is possible to process ACH payments on the same day.

 

Confirmed: The Truth About ACH

ACH is a topic that can still be confusing, even for payments experts. We hope that this blog has cleared up a few of the most common myths about ACH payments. To recap:

ACH is great for one-time and recurring payments alike.

Customers have a low-effort way to connect their bank accounts for ACH payments.

With the right vendor, ACH payments of up to $1 million can be transacted on the same day.

At CSG Forte, we believe the payments experience can be simpler and more secure. Do you want to learn more about ACH and how it can help organizations like yours? Collect ACH payments cost-efficiently with CSG Forte.

What Can ACH Processing With a Nacha-Preferred Partner Do for Your Business?

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While digital payments have been around for decades, in the four short years since the pandemic made digital payments a bigger part of everyday life, Automated Clearing House (ACH) payment processing has become an integral part of digital commerce. The ACH Network—which is the only payment system that reaches all U.S. bank and credit union accounts—securely handled 31.5 billion payments valued at $80.1 trillion in 2023. In 2024, ACH payment volume increased 6.8% to $86.2 trillion—and its popularity is only expected to grow.

But as with any payment acceptance method, the stakes are incredibly high. Online shopping scams were the second-most common type of fraud reported to the Federal Trade Commission in 2023, which was the first year total reported fraud losses reported topped $10 billion. This heightened fraud risk and the financial damage that comes with it is why industry leaders lean heavily on payments partners preferred by Nacha, the nonprofit governing body behind the ACH Network.

So, let’s learn more about what ACH processing is, how ACH processing can impact your business, and why you should choose a Nacha-preferred payment partner to handle your company’s transactions.

 

What Is ACH?

ACH processing is a popular, reliable way to securely send and receive money—and you probably already use it more often than you know. For example, when your paycheck is deposited into your checking account, your employer is depositing your pay via ACH processing. If a customer makes a payment for your goods and services, the bank associated with your customer’s credit or debit card can deposit your funds directly to your business account using ACH processing.

ACH was designed to support increasing payment volumes as the world began to transition to automated payments. In the 1970s, financial transaction volumes were difficult to manage with early computer infrastructure. As a result, the Federal Reserve (i.e., the Fed) stepped in to fund an automated system of computer programs specifically designed to process and settle payment claims between financial institutions.

With ACH, merchants can process check and card payments without making authorization requests to credit card networks or issuing banks. Instead, ACH processing goes through the Fed or the ACH Network to secure payments from a receiving depository financial institution (RDFI). The RDFI then posts the payment into the requestor’s account.

This eliminates the need to pay network fees to a credit card company, meaning ACH payments cost much less to process. This saves merchants money with every transaction.

Nacha has repeatedly raised the daily transaction limit for ACH. This means that not only do ACH payments cost merchants less, but they can also accept much larger payments (up to $1 million per day) and recognize revenue faster.

 

ACH vs. Credit Cards: What’s the Difference?

No matter what payment options you offer, customers want to pay in the most convenient way for them. Often, this means they will use a credit card or another form of digital, contactless payments. But added convenience can also add costs. So what happens when a credit card payment is processed in the traditional way?

  1. The customer places an order or makes a purchase. The card information is received at point of sale.
  2. The merchant checkout accepts the card information and sends it to a service to manage the interactions with the merchant’s bank.
  3. The service sends the information securely to the merchant’s bank processor.
  4. The merchant’s bank processor contacts the credit card network, like Visa or Mastercard.
  5. The credit card network sends the request to the issuing bank for the customer’s credit card.
  6. The issuing bank determines if the purchase is authorized and returns that information to the credit card network who sends it back to the merchant’s bank process.
  7. The merchant’s bank sends to the merchant’s point of sale confirming if the payment is approved or declined.

Each of these steps adds cost. Each of these steps adds cost, as each entity involved in the transaction must get paid. Therefore, eliminating steps via adopting ACH processing reduces expense on top of adding efficiency.

 

ACH Processing

At first glance, the ACH payment process looks very similar, but there are a few core differences.

The ACH processing starts the same way at the point of sale before entering a processor’s system. But that’s where the similarities end.

  1. The customer makes a purchase. The account information is received at point of sale.
  2. The merchant checkout accepts the account information and sends it to a service to manage the ACH transaction.
  3. The ACH processor handles confirmation by contacting the originating depository financial institution (ODFI) for origination of the payment.
  4. The ACH payment request is sent through the ODFI, which requests settlement from the Fed.
  5. The Fed confirms that the payment is valid with the RDFI.
  6. The RDFI responds, by communicating back down the chain in reverse to approve or deny the payment.
  7. Funds are sent directly to the merchant’s bank account.

These last three steps are what make the difference in cost and security between ACH and traditional credit card payments. Because ACH avoids navigating several fee-incurring steps, the result is less costly and more reliable, especially when dealing with high transaction amounts as large as $1 million.

 

Standard vs. Same-Day ACH Processing

One major benefit of ACH processing is the speed a merchant can receive customer funds. For most ACH processors, funds may be available as soon as the next business day, depending on when the transaction occurred. Same Day ACH, which is newer, allows merchants to receive funds the same day the purchase was made.

Why does Same Day ACH processing matter? It’s simple: Same-day processing means merchants collect funds faster. This maximizes the benefit generated from ACH payments. Effectively, Same Day ACH lets merchants access payment funds quicker so they can invest in their businesses quicker. The increased cashflow from faster processing and fewer fees than processing credit card payments means that businesses who use Same Day ACH can get back to doing what they do best and worry less about transaction costs.

However, most payment processing companies do not offer Same Day ACH. And if they do, they do not own the technology. Merchants that work with payment processors that don’t own the technology are subject to additional fees for processing Same Day ACH.

CSG Forte is different. CSG Forte’s same-day ACH technology gives merchants the ability to receive funds quicker and more economically than they would by working with other payment processors.

 

3 Reasons You Should Only Choose Nacha-Preferred Payments Partners

Speed isn’t the only feature merchants should look for when shopping for a payments partner. Security and reliability are equally important. That’s why when considering payment processing options for your business, it’s crucial to understand the benefits of working with a Nacha-preferred partner. While there are many additional reasons (peace of mind at the top of the list), here are three of the most important reasons to stick with Nacha-preferred providers.

They validate everything: The payment processors that want to align with Nacha need to go through a strict validation procedure. Nacha also updates and develops more stringent rules and standards to offer the best possible security to its customers. That means you know the community of preferred partners on Nacha’s list follows the highest level of security standards. Stricter rules help with effective risk management and account validation services, thereby offering an additional layer of security against fraud.

They secure personal data: In addition to being innovators in transactions, Nacha-preferred partners also secure their customer data with best-in-class encryption. By signing up with these partners, you can feel confident that your account information and account numbers are locked behind a safe vault.

They partner with top financial institutions: Transferring money through ACH payment solutions is already significantly cheaper than moving it through credit/debit cards or wire transfers. Today, top technology providers are reducing the time to process ACH payments by partnering with financial institutions directly. By advancing the ACH network, Nacha has already reduced the time to process transactions over.

 

Your Business Needs ACH Processing

Simply put, ACH processing allows businesses to receive and have access to payment funds faster. Not only that, but the larger daily transaction limit means merchants can access more payments funds via ACH quicker, as well. Beyond the speed and convenience of ACH, businesses save money on each ACH transaction. Because they don’t need to pay settlement or interchange fees that arise from merchant networks, merchants can secure a larger chunk of each transaction. Especially when considering that compared to cash and paper checks ACH is also more secure and cannot be physically lost, it’s a powerful tool for businesses in many industries, from retail to healthcare and from financial services to real estate and telcos.

With the power that a great ACH solution can bring to your payments, it is no wonder that so many brands are adding it to their toolbox. However, if you’re interested in learning more about ACH processing or how you can get the most out of ACH with same-day processing, CSG Forte can help.

Ready to learn more about ACH and how it can drive more value for your business? Check out CSG Forte’s ACH processing capabilities.

6 Essential Features for a Better IVR Payment System

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Paying bills may never be customers’ favorite activity, but reducing friction points during the bill-paying process can get your invoices paid faster. In fact, Millennials report they are more likely to prioritize paying bills that are easy to pay before taking care of those that are more inconvenient.

Unfortunately, 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. By creating convenient payment options for your customers, you improve their overall experience, which can lead to collecting more on-time payments.

One way to conveniently accept payments is with a thoughtfully designed interactive voice response (IVR) payment system. IVR payment systems use Voice over Internet Protocol (VoIP) technology to guide customers through the payment process over the phone. These systems are a convenient, efficient and secure method of taking payments that benefits both customers and merchants. However, poorly designed IVR payment solutions increase customer frustrations instead of reducing them.

So what should you look for in an IVR payment system so you can improve your business and avoid any pitfalls? Read more to learn the 6 key features the best IVR systems have 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 their credit card or Automated Clearing House (ACH) 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, which cost 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.

6 Must-Have IVR Payment System Features

IVR payment systems need to provide:

  1. Multiple payment options (credit card and ACH) for full or partial payments
  2. 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
  3. A variety of 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
  4. An outbound IVR system that
    • Delivers payment reminders
    • Allows customers to schedule a convenient time to receive an automated call to make their payment
  5. The ability to easily make changes to your IVR system based on your business’ needs
  6. 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’s IVR solution, live agent calls have been reduced by up to 70% for payments, on average.

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

‘Tis the Season for Secure Payments: Protecting Your Business from Holiday Fraud

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With shoppers feeling the pinch of inflation over the last year, the holiday spending outlook is a mix of cheer and bah, humbug. Just more than one-quarter (27%) of consumers plan to spend less this year than last, but slightly more (28%) plan to spend more, according to Boston Consulting Group research.

And a large portion of those consumers will be doing their holiday shopping online. In 2023, global online retail sales reached an estimated $5.8 trillion U.S. dollars globally, and projections show an expected 39% growth rate, with the global totals to exceed $8 trillion by 2027. And despite high inflation in 2024, holiday sales are expected to increase between 2.5% to 3.5% this year, bringing the total to between $979.5 billion and $989 billion, according to National Retail Federation information. E-commerce holiday sales will reach between $289 billion and $294 billion in 2024, according to research by Deloitte, compared to $252 billion in 2023.

While that’s overall good news for businesses, it also means competition for buyers’ attention (and cash) is fiercer than ever. To make sure your business stands out among other companies vying for consumers’ holiday purchases, focus on keeping your company and your customers safe from that ever-present Grinch: holiday fraud. Here are three ways you can keep your customers’ (and therefore your own) holiday merry and bright:

 

1. Hosted Payment Pages Are Your Digital Shield

The global community continues to adopt online payments at breakneck speed—65% of adults reported using a digital wallet at least once a month. And all that money moving around means cybercriminals are eager to find ways in. That’s why safeguarding your customers’ payment data on securely hosted payment pages with a reliable payments provider should be top of your holiday to-do list. By directing your online payments through secure pages, you’re ensuring that sensitive payment data doesn’t linger in your system like a misplaced ornament.

What’s so special about securely hosted payment pages? Both your company and your customers are safe, and transactions are seamless. Customers enter their payment details on a page hosted by the payments provider, keeping the crucial data away from your servers and reducing your PCI (Payment Card Industry) Data Security Standard scope. This ensures a worry-free experience for both you and your customers that leaves would-be fraudsters out in the cold.

 

2. Digital Wallets: Secure, Convenient—and Gaining Popularity

There’s no better gift to offer your customers than secure and convenient digital payment methods. That’s why offering your customers payment options using their preferred digital wallet is guaranteed to put you on their “nice” lists. With enhanced security features, digital wallets provide a seamless, hassle-free and speedy checkout experience.

By offering popular digital wallets at your checkout, you’re not just embracing the holiday spirit—you’re also aligning with what consumers trust. Because digital wallets have such a robust safety record, consumers are trusting their services more and more. In fact, more than half (57%) of respondents to a National Retail Federation survey say they plan to use digital channels for their 2024 holiday purchases, and more than three-quarters (76%) of respondents to a Bain & Company survey said they planned to buy at least half of their holiday purchases online, creating more opportunities for bad actors’ schemes to steal valuable data. That’s because digital wallets safely store payment credentials and employ advanced encryption techniques to keep them protected. It’s a win-win—customers get a seamless payment experience, and you get the peace of mind that their data is protected.

 

3. Use Tokenization to Thwart Fraudsters

While fraudsters will always try and bring a little Grinch to the holidays, you can keep them off your payments platform (and on the “naughty” list) by replacing actual card and ACH payment data with generated randomized tokens. This “tokenization” converts your customers’ sensitive personal information into tokens that have no intrinsic value and provide no value to fraudsters—you can think of it as the equivalent of leaving fake presents under the tree for anyone attempting to snatch them. A reputable payments provider can assist you in implementing this robust layer of security, ensuring that even if a Grinch manages to sneak into your system, they leave empty-handed.

Don’t let the fear of fraud steal your joy this holiday season. By following these three tips—utilizing hosted payment pages, offering secure digital payment methods and embracing tokenization—you can ensure your online business stays secure while shoppers stuff their carts.

CSG Forte is here to protect your payments this holiday season. Contact us to get started today.

What Are Electronic Payments and How Can They Help Your Business?

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Imagine. You want to purchase a doughnut at the local bakery, but instead of handing over your credit card, you reach into your pocket and pull out a few grains you picked on your farm earlier that day. After all, the baker can use the grains to make more dough. Seems crazy, right? However, the barter system was a cornerstone of transactions in our early history. Lucky for us, advances in payment acceptance mean you no longer are tied to your farm (in fact, you don’t even need to have a farm nowadays). But the biggest advance in payment acceptance isn’t particularly tangible. Why? Electronic payments. The invention of electronic payments makes receiving and making payments online, via mobile and at the point of sale a whole lot simpler.

 

What Are Electronic Payment Systems or E-Payments?

You might be asking, what exactly encapsulates the meaning of electronic payments. the Electronic payments are any payment completed through an electronic medium. These methods include credit and debit cards, ACH payments and virtual cards. These electronic methods replace physical checks or cash, and they can occur at the point of sale or online. For example, consumers can use their virtual rewards card to pay for their coffee at the drive-through.

 

The Benefits of E-Payments Process 

With e-payments, users can enjoy:

  • Payment ease: Many forms of e-payment allow users to pay with as little as a tap. With an easier payment process, you improve the user experience for payers and payees.
  • Reduced processing costs: Processing checks involves printing, signing and mailing, requiring manual labor and material expenses. Electronic payments eliminate these processes, saving you money on payment processing.
  • Greater visibility: With electronic payments, you can track transaction status, access financial metrics and follow audit trails for compliance needs. These tracking capabilities are often integrated into e-payment platforms, so following the status of your financials is much easier than when manually processing physical payments.
  • Improved security: Handling cash or checks can easily lead to theft or fraud. With electronic payments, you eliminate passing physical money between hands, and you can enjoy built-in encryption that protects user data during transactions.

 

Types of Electronic Payments Systems and Their Advantages

There are various types of e-payments, and they all offer unique advantages.

ACH Debit Pull

The Automated Clearing House (ACH) processes electronic transactions between bank accounts. In the case of an ACH debit pull, a payee initiates a pull of funds from a payer’s account. One of the most common examples of a debit pull is direct deposit for employees.

These debit pulls are typically low-cost, and sometimes they’re completely free. The most significant advantage of this electronic payment is it eliminates the need to collect and process checks or deposit cash.

ACH Credit Push

An ACH credit push is the opposite of a debit pull. Rather than the payee pulling the funds from the payer’s account, the payer pushes the amount out of their account and to the payee. Credit pushes are common for a range of online payments where the vendor is an established company. ACH payments often come with lower processing fees than credit cards, making them a practical option for some businesses.

Credit Cards and Debit Cards

With a credit card, a user borrows money from their card issuer up to a certain predetermined limit. The cardholder is then responsible for paying this borrowed money back and can be charged interest for outstanding balances. Debit cards on the other hand rely on funds that users have deposited in a bank account.

In the case of e-payments, credit cards are fast and accessible. This secure payment method is easy to use at the point of sale. With the growing use of chip payments with credit cards, every transaction has a unique code that makes it challenging to steal sensitive information. Credit cards offer more protection against fraud as you are borrowing money are in turn not responsible for as much liability. A victim of debit card fraud could be fully liable for fraudulent transactions depending on the time since the transactions and bank policies.

Cryptocurrency

Cryptocurrency is special as it does not rely on third parties like banks or governments to process payments. Crypto has elevated tremendously in popularity over the last five years due to this decentralization factor. Another advantage of cryptocurrency as a digital payment is that there are low payment processing fees.

Mobile Pay, Digital Wallets, and Contactless NFC Payments

Mobile pay relies on a mobile device, such as a smartphone, smartwatch or tablet, to complete a transaction. Many of these devices are compatible with mobile wallets that allow users to upload their card information for use at point-of-sale terminals. These terminals must have near-field communication (NFC) to receive payment information from the mobile device and accept payment.

Mobile payments can also include mobile payment platforms that use ACH payments to complete transactions. This payment type offers convenience since most people carry some kind of mobile device. Additionally, these mobile payment methods typically require authentication before completing a transaction, making them a secure electronic payment option. NFC payments also provide the advantages of being fairly hygienic, quick, and very secure.

 

The History of Electronic Payment Systems

Electronic payments have their roots in the 1870s, when Western Union debuted the electronic fund transfer (EFT) in 1871. Since then, people have been enamored with the idea of sending money to pay for goods and services without necessarily having to be physically present at the point of sale. Technology has been a driving factor in the development of electronic payments. Today, making a purchase is as easy as tapping a button on your smartphone. Work with streamlining payment methods has been hard-won.

From the 1870s until the late 1960s, payments underwent a slow but gradual transformation. In the 1910s, the Federal Reserve of America began using the telegraph to transfer money. In the 1950s, Diner’s Club International established itself as the first independent credit card company, soon followed by American Express. In 1959, American Express introduced the world to the first plastic card for electronic payments.

Entering the 1970s, people became more reliant on computers as part of the buying process. In 1972, the Automated Clearing House was developed to batch process large volumes of transactions. NACHA established operating rules for ACH payments just two years later.

 

The (Wide, Wide) World Wide Web

Then along came the Internet. In the 1960s, ARPANET, a precursor to the modern Web, was built as a military network to improve communication. In the 1990s, online internet banking services were offered to bank customers. Those first online payment systems were anything but user-friendly—users had to have specific encryption knowledge and use data transfer protocols.

Soon, development across the Web, and the eventual invention of Web 2.0, set the stage for online sites to participate in what’s now known as e-commerce. In 1994, Amazon, one of the pioneers of eCommerce, was founded, along with a slew of other websites that we know and love to purchase on.

Payment acceptance and securing payments have been specific challenges for e-merchants and payment processors. In the early days of electronic payment processing, you needed special equipment and software to send a payment for goods. Now, payment acceptance can be integrated into websites, mobile platforms, and at the point of sale for scalability amongst merchants big and small.

 

Keeping Your Private Data Safe

As technology changes at an increasingly rapid pace, however, keeping your data safe has been at the forefront of most merchants’ minds. It’s easy to see why. Data breaches can have long-reaching financial and systematic impacts on businesses and can damage the reputation of long-standing organizations. What’s more, breaches can also spell financial ruin for companies without the financial, legal and logistical bandwidth to weather the storms of a hack.

Regulations by both NACHA and PCI standardize how payment data is received, stored, transmitted and processed for each transaction and help reduce the likelihood of an attack. However, it’s important that payment processors who offer PCI compliance programs stay ahead of those who wish to do harm to hardworking business owners by hacking their systems.

For point-of-sale transactions, EMV-enabled (also known as “chip card”) transactions add another level of encryption to your sales when performing card-present sales. End-to-end encryption, like what CSG Forte offers, provides a level of security to your entire payment processing system from terminal to payment acceptance and beyond. When accepting payments online, SSL webpages and other methods of data encryption help ease the worry of consumers and take some of the burden off merchants to remain PCI-compliant.

 

What’s Next For Electronic Payment Systems?

According to a McKinsey study from 2020, 78% of Americans currently use at least one form of digital payment. Offering consumers more ways to efficiently pay bills and purchase the things they want should be a key objective for all modern business owners.

Hot-button technologies like cryptocurrency and blockchain could be another way payment processing gets another technological push into a new era. After all, some cryptocurrency contenders aim to revolutionize the processing time for electronic payments, and if successful, can completely change the game for the payments industry. But in the interim, new trends like PIN on Glass acceptance to allow customers to use their PIN for mobile point-of-sale transactions, as well as contactless payments, same-day ACH and advancements in payment APIs all are geared towards making payment processing simpler, faster and more efficient.

For the last century and a half, the world of electronic payments has seen several notable technological shifts. As we speed through the industrial advances that the payment industry currently faces, we will only see a payment processing scheme that is safer, faster and operates how consumers and merchants need.

 

The Benefits of E-Payments for Your Business

Your business can benefit from e-payments with the help of:

  • Improved supplier relationships: When your vendors can enjoy the ease of e-payments, they know that you value their time, security and ease of payment processing. These e-payments also include remittance data for ease of reconciliation. Many modern suppliers may come to expect e-payment options and may even turn down relationships without this convenience factor.
  • Increased customer satisfaction: Your customers will enjoy the convenience and security of e-payments as much as your vendors. When paying for products or services is easy, consumers are more likely to follow through with a purchase.
  • Reduced costs: Processing cash and checks can require hours of physical labor and expenses dedicated to stamps and mailing. Enjoy the reduced administrative overhead of e-payments.
  • Enhanced security: With encryption and unique transaction codes, e-payments are far more secure than physical cash or checks. Plus, electronic payments eliminate the risk of losing cash or checks before they get deposited.
  • Greater flexibility: If you offer various types of e-payments, consumers can pay in a way that works for them. For example, a buyer who forgot their wallet can use their mobile wallet to cover costs. This flexibility encourages more sales.

 

How Can CSG Forte Help Optimize Your Electronic Payment Systems

CSG Forte offers a comprehensive electronic payment solution that supports online, in-person and phone payments. Our payments platform supports secure, flexible payments with reliable reporting and a user-friendly interface. With recurring payment capabilities, intuitive bill presentation, point-of-sale support and trusted security practices, CSG Forte supports the success of modern businesses.

See what electronic payments can do for you, and get started with our platform today.