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<h2>What you’ll learn</h2>


<ul>
<li style="list-style-type: none;">
<ul>
<li>What the Automated Clearing House is and how ACH payments work</li>
<li>Key advantages ACH payments for small business owners</li>
<li>How to set up and send secure ACH payments</li>
</ul>
</li>
</ul>



In the late 1960s, a small group of frustrated bankers created the first paperless money transfer system, eventually leading to the widely used Automated Clearing House (ACH) Network. Today, this network supports critical everyday financial operations like direct deposits and automatic bill payments. Whether you’re cutting paychecks for your employees or using automatic billing to pay vendors, the ACH Network likely already plays a role in the financial operations of your business.
<h4>Fun Fact: If you’ve ever had payday fall on a weekend or a bank holiday, you can thank the ACH Network for depositing your paycheck on the Friday before.</h4>
For businesses that send or receive <a href="https://gohopscotch.com/blog/paying-yourself-as-a-business-owner/">recurring payments</a> (think outgoing payments like rent, or incoming monthly service fees from clients), utilizing the ACH Network has significant advantages. It can streamline your invoicing and bill pay workflow and even reduce the amount of fees you pay. 
Let’s dig into the basics of ACH payments (also known as bank transfers), how much they cost, and how to use this tool to help your small business succeed. 


<h2>How ACH payments work</h2>


To initiate <a href="https://www.nacha.org/content/how-ach-payments-work">an ACH payment</a>, you’ll need to provide some basic banking details like your name, account type, payment amount, and routing and account numbers. ACH transfers are considered safer than traditional checks because they offer more robust data protection methods like encryption and secured third-party servers.
Once you initiate a payment, your financial institution takes the reins and collaborates with an ACH operator to ensure seamless fund transfer to the recipient&#8217;s account.
Read: <a href="https://gohopscotch.com/blog/ach-vs-wire-transfer/">The Difference Between ACH and Wire Transfer</a>


<h2>How much does it cost to pay someone via ACH?</h2>


ACH transfer fees vary widely, but the median cost for businesses in 2022 ranged from <a href="https://www.afponline.org/publications-data-tools/reports/survey-research-economic-data/Details/paymentscost">0.26 to 0.50</a> cents per transaction. Compared to credit card fees which typically cost around 1.5%-3.5%, that’s a big potential savings. 
Pro Tip: Want to pay or get paid via ACH? <a href="https://gohopscotch.com/invoicing">Hopscotch</a> is one of the only payment solutions offering zero-fee bank transfers. 


<h2>ACH payment types</h2>


Have you ever signed up for automatic bill pay? If so, you&#8217;ve authorized an ACH debit transfer, where your billers &#8220;pulled&#8221; funds directly from your account. Conversely, ACH credit transfers “push” funds into the recipient&#8217;s account before settling with the sender’s account. 
Direct deposits and Social Security benefits are two of the most common examples of ACH credit transfers. If you use ACH payments in your business, you’ll most likely use an ACH debit transfer.
<img loading="lazy" decoding="async" class="size-full wp-image-1641 aligncenter" src="https://hopscotchwp.wpengine.com/wp-content/uploads/2023/11/pexels-photo-7242768.jpg" alt="Woman working on laptop on her front steps" width="800" height="533" srcset="https://hopscotchwp.wpengine.com/wp-content/uploads/2023/11/pexels-photo-7242768.jpg 800w, https://hopscotchwp.wpengine.com/wp-content/uploads/2023/11/pexels-photo-7242768-300x200.jpg 300w, https://hopscotchwp.wpengine.com/wp-content/uploads/2023/11/pexels-photo-7242768-768x512.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" />
<h2>Top perks of using ACH for small business transactions</h2>


Accepting ACH payments can be a financial game-changer for many small businesses. They provide more consistent and reliable payment methods by reducing the need for repeated payment entry. Here are a few of the other top benefits: 
<ul>
<li style="font-weight: 400;" aria-level="1">Low Fees: ACH payments are less expensive than credit card transactions because the fees tend to be lower. All transaction fees eat into profits, especially for small businesses with tight margins, so offering ACH payments can be an effective way to keep more of your revenue. </li>
<li style="font-weight: 400;" aria-level="1">Increased Convenience: Businesses that automate with ACH payments save time and reduce the risk of missed payments and late fees. </li>
<li style="font-weight: 400;" aria-level="1">Reduced Paperwork: Switching to ACH payments from checks streamlines record-keeping and minimizes paperwork. With ACH transactions, you have clear electronic records of what’s coming in and going out of your business, making tracking and managing your finances easier. </li>
<li style="font-weight: 400;" aria-level="1">Improved Cash Flow: ACH payments offer quicker fund transfers than traditional checks, resulting in faster processing times and improved cash flow for businesses.</li>
<li style="font-weight: 400;" aria-level="1">Predictable Revenue: Recurring ACH payments can create a predictable revenue stream for businesses. This provides greater financial stability and fewer gaps in cash flow, which can improve business planning.</li>
</ul>


<h2>Best-fit businesses and transaction types for ACH</h2>


ACH payments can simplify payment processing and create more streamlined transactions with established payees—like repeat vendors or clients. Offering ACH payments makes great sense for a wide range of small business models and scenarios, including but not limited to:
<ul>
<li style="font-weight: 400;" aria-level="1">Service-Based Businesses. If you’re a consultant, coach, or freelance tradesperson, accepting payments via ACH can be an effective way to get paid on time every time for your services. </li>
<li style="font-weight: 400;" aria-level="1">Streamlined Payments for Established Partners. If you work with larger companies as an agency or freelancer, they likely have systems to easily facilitate ACH payments to make the payment process smoother.</li>
<li style="font-weight: 400;" aria-level="1">Scheduled and Recurring Payments. ACH transfers can be a powerful solution for outgoing and incoming payments like bills or subscriptions. If you accept subscription-based payments, getting paid via bank transfer is more affordable and predictable than getting paid via credit card (which can be canceled, max out, or expire). </li>
<li style="font-weight: 400;" aria-level="1">Rental Properties. If you&#8217;re a landlord or property manager, ACH payments can simplify collecting rent.</li>
</ul>
Read: <a href="https://gohopscotch.com/blog/make-ach-payment/">ACH transfers: What are they &amp; how do these payments work?</a>


<h2>Safety tips and due diligence</h2>


If receiving an ACH payment from clients, make sure you have robust security measures in place to prevent unauthorized transactions and payment failures. That means implementing strong authentication protocols and cybersecurity investments to keep you and your customers safe. Here are six measures to take to secure your ACH transactions:
<ol>
<li style="font-weight: 400;" aria-level="1">Choose a trustworthy partner: Choose an ACH payment processor committed to security and one that offers advanced fraud protection. (Hopscotch users are protected by the latest encryption and security measures). </li>
<li style="font-weight: 400;" aria-level="1">Lock up that data: Guard customer data with encryption and access controls for ultimate security.</li>
<li style="font-weight: 400;" aria-level="1">Champion awareness: Train employees in security best practices and spread the word about online safety to customers.</li>
<li style="font-weight: 400;" aria-level="1">Monitor, monitor, monitor: Keep tabs on ACH transactions, promptly addressing any red flags.</li>
<li style="font-weight: 400;" aria-level="1">Stay updated: Update software and systems to shield against vulnerabilities.</li>
<li style="font-weight: 400;" aria-level="1">Have a backup plan: Backup and disaster recovery plans can ensure business continuity.</li>
</ol>


<h2>How to accept ACH payments</h2>


Getting paid via ACH is a simple and affordable option for small business owners. Here&#8217;s how to take advantage of this payment method.
Step 1: Choose a partner. Select an <a href="https://gohopscotch.com/small-businesses/">ACH payment processor</a> with a spotless reputation, user-friendly tools, competitive pricing, and top-shelf customer support.
Step 2: Gather the essentials. You’ll need your bank&#8217;s routing and account numbers to get set up.
Step 3: Offer ACH payments as a service. If accepting ACH payments from clients, you may need to sell them on an ACH payment setup. Use this blog post as a reference point to educate on low fees, the added convenience and increased efficiency ACH payments provide.
Step 4: Input customer data. Enter your customers&#8217; banking details accurately into your ACH payment system. Double-check the information to prevent payment errors.
Step 5: Test. Perform trial transactions with trusted sources to validate your ACH setup, guaranteeing smooth sailing for your clients.
<h2>Why ACH payments are a win-win</h2>
ACH payments make life easier for businesses by reducing transaction costs, improving record-keeping accuracy, and simplifying business payment processes. It&#8217;s also easier for clients and vendors. The funds are automatically withdrawn and deposited into the appropriate account.
<h3>Get started with Hopscotch</h3>
As a business owner, your focus is finite. Automation tools that can improve workflows, reduce errors, and win back time can help you pay more attention to revenue-generating work. 
Save time and reduce frustration by using <a href="https://gohopscotch.com/small-businesses/">Hopscotch</a> to manage all your financial operations, starting with incoming and outgoing ACH transactions. It’s quick, reliable, and there are no transaction fees. Ready to make the jump? <a href="https://gohopscotch.com/pricing/">Start your free trial today.</a>

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