Another Way For Customers To Pay In a Tight Economy
I'm sure many of you have experienced some drop in sales due to the economy over the past few months! With the credit market tightening, people have less room on their credit cards then ever before. For the right e-businesses, ACH is a great alternative payment method.
If you aren't familiar with ACH, it's just like your automatic deposit of your paycheck but in reverse. A customer can simply pay directly from their checking account by giving you the numbers at the bottom of their check. Of course, you do have to be setup with an ACH processor with a merchant account similar to getting setup to take credit cards.
Awesome! Now there's another method to take a customer's payment! What now? Well, there's pluses and minuses to this payment method. First, the upside:
Less expensive. Unless you are using Paypal, taking an ACH payment is less costly than accepting a credit card.
Now you can take orders from customers without credit cards or customers who's credit card limit is maxed out.
Okay, now for the limitations:
Just like a paper check, the transaction could return. Fortunately, it only takes about 4 days for a return to process back to you.
Customer's can chargeback transactions a little easier than credit cards for the first 60 days.
The upside is great, the downside limits how you might have to process orders for your customers. Some businesses simply wait 5 days before they ship product. That gets you past the 4 day window for normal returns. For some businesses it just isn't the right payment method but for many, it's a great alternative with few downsides. It really just depends on how you work with your customers on their orders.
Since ACH is a fairly new payment method in the past 10 years, there are not as many shopping carts and gateways that have the ACH option, but that's changing. As more businesses look for payment alternatives, more and more software companies are building in ACH as another transaction option.
1 Comment
Dennis says:
The ACH is a rapidly growing trend and more and more reputable payment service providers are including this feature into their payment solutions.
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