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Federal Reserve Approves Same-Day ACH Processing
In a great move for the payments industry, the Federal Reserve has approved NACHA’s plan for same-day ACH processing. Long heralded as a better and safer payment processing solution than credit and debit card processing, the only thing preventing ACH from being the preferred payment method for the industry was its processing times. With same-day processing, the electronic payments world could be changed.
What is ACH Processing?ACH processing involves using a consumer’s bank account number for transactions as opposed to credit or debit card numbers. With ACH, the merchant can simply pull the funds straight from the consumer’s bank account rather than having to charge a credit card and go through issuers. Because payments are taken from the consumer’s account, merchants who bill monthly charges have long preferred ACH processing. One-off purchases have never been right for ACH, given their processing times of up to two or three business days. However, now that ACH payments can be processed during the same day as the purchase, it could bring a healthy dose of change to an industry riddled with credit card fraud.
What to Know about Same-Day ACHThere are a few caveats that come along with same-day ACH processing. According to the Federal Reserve’s approval. According to AmericanBanker.com, morning settlements will be cleared by 1 PM that day, while afternoon settlements will be cleared by 5 PM. Originating banks in ACH transactions will have to pay a 5 cent fee to receiving banks, but this is a small price to pay in return for the security and the demand that will likely result from faster ACH processing.
Accepting ACH Payments for Your BusinessWhile same-day ACH processing is not yet in place, it’s still a good time for merchants to re-evaluate their payment processing capabilities. ACH can provide a safer, and now, a quicker way to process payments from consumers. With cybercrime and credit card fraud at all time highs, it might be time for a more sensible solution. ECS World offers diverse payment processing solutions, including ACH processing capabilities. If you think ACH processing may be right for you, contact one of our merchant account specialists today.
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