How to accept ACH payments as a business

Accepting ACH payments is a smart, cost-effective way to collect client payments. In 2023 alone, businesses processed 6.6 billion B2B payments through the ACH Network—a 10.8% jump from the prior year, proving ACH's growing role as a fast, secure option, according to NACHA.

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The Automated Clearing House (ACH) network allows businesses to receive payments electronically—bypassing the hassle of paper checks and the expense of credit card processing fees. This guide will walk you through how to accept ACH payments as a business, helping you prepare and get started easily—even if you're a small business.

How do ACH payments work?

An ACH payment is an electronic bank transfer processed in batches through the Automated Clearing House network, offering a cost-efficient alternative to credit card payments. Major brands like Walmart and Amazon rely on ACH for secure, low-cost payments at checkout, and it’s commonly used for payroll direct deposits and automatic bill pay.

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When accepting ACH payments, it’s helpful to know the difference between ACH debit and credit:

• ACH debit: A business pulls funds from a customer’s account—ideal for collecting payments.‍
• ACH credit: Funds are pushed to another account—common for payroll or refunds.

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Understanding these options lets you choose the right method based on your transaction needs. For most businesses, ACH debit is the go-to for collecting payments. Here’s the typical process when a customer initiates a payment:

1. Customer authorization: The customer initiates and authorizes a payment from their bank account, either by filling out an online form or providing written consent.
2. Payment request: The business submits the customer’s payment request to their own bank.
3. Bank submission to ACH network: The business’s bank submits a digital payment file to the ACH network.
4. Batch processing and transfer: The ACH network processes the digital payment files on to the customer’s bank.‍
5. Settlement and deposit: The customer’s bank releases money to the business’s bank account, typically within 1-2 business days.

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To make ACH payments possible, businesses first need to learn how to set up their ACH payment processing system.

How to accept an ACH payment as a business

Setting up a processing system to accept ACH payments for your business is simple. Here are the steps involved:

1. Set up your business bank account: Open a business bank account at a financial institution that supports ACH transactions. Most banks offer this service, but it’s worth confirming the details.
2. Choose a payment processor: Select a payment processor or accounting software that allows you to set up ACH payments. Options like QuickBooks, Square, and Stripe offer easy integration. Check their fees, services, and security protocols to find the best fit for your business.
3. Establish a merchant account: Set up a merchant account to access the ACH network and request payments from customers. Be prepared to provide details like your business name, address, personal ID, business documents (e.g., license, operating agreement), federal tax ID, and estimated transaction volume.
4. Collect customer details and authorization: With your account ready, send customers an ACH authorization form to collect their bank details, including their name, bank name, account number, and routing number. You can also request an ACH debit directly through your payment platform.‍
5. Integrate ACH payments into your payment system: Now, add ACH payment options to your payment setup, whether online, in-person, or via invoice. Once a customer initiates payment, funds will transfer directly into your business account, typically within 1–3 days.

Accepting ACH payments online

For businesses that want to accept ACH payments online, the key is integrating with an online platform that supports them. While setting up your ACH payment system, make sure to:

• Choose a payment processor for online transactions: Select a gateway that can integrate directly into your online platform. Look for one that offers ACH as an option during checkout and can handle web-based payment authorizations.‍
• Provide an online authorization option: Make the ACH authorization form available electronically. Many platforms offer a simple checkbox for customers to authorize ACH at checkout.

Accepting recurring ACH payments

Recurring ACH payments are ideal for businesses that offer subscription-based services, memberships, or any billing cycle that requires automatic payments. Here’s what else to consider:

• Pick a processor with recurring payment support: Pick a payment processor that supports recurring ACH payments, so customers can authorize ongoing transactions with a single consent.
• Adapt the authorization for recurring payments: Customize your ACH authorization form to cover recurring charges, including details like billing frequency. This way, customers know exactly what they’re agreeing to upfront.

Accepting ACH payments instantly (Same-Day ACH)

For businesses that want to set up a faster ACH process, consider Same-Day ACH. This makes transactions clear on the same business day, making it useful for time-sensitive payments.

• Select a processor offering Same-Day ACH: Choose a processor that offers Same-Day ACH to make sure funds are available within the same business day. However, keep in mind that these transactions often come with higher fees.‍
• Set clear expectations with customers: Let customers know that Same-Day ACH is available for urgent payments. For invoices or time-sensitive purchases, make it clear that they can choose this option for faster fund transfers.

Benefits of setting up ACH payments

Accepting ACH payments offers several benefits:

• Cost-effective: ACH fees are low, typically ranging from 26 to 50 cents per transaction, much cheaper than alternatives like credit cards (1.5% to 3.5% per transaction) or wire transfers (up to $15 domestically).
• Secure: ACH payments are highly secure and better regulated than checks, reducing the risk of loss or theft. Unlike wire transfers, ACH payments can sometimes be reversed if an error occurs.
• Fast and reliable: ACH transactions settle within 1–3 business days, with options for recurring payments to automate collections for subscriptions or ongoing services.‍
• Efficient: ACH payments are fully digital, cutting out manual processes like handling paper checks or visiting the bank, which saves you time.

Integrate ACH payments into your AP process with Ramp

In addition to being a great payment option for your customers, ACH transfers offer an efficient way to pay your own bills. Ramp’s modern finance platform offers flexible payment options and AP automation features to transform the way you pay your vendors:

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• Time-saving automation: Ramp’s AP automation software can help you save an average of 10 minutes per invoice by digitizing your approval workflows and automating document matching.
• Efficient vendor setup: Our platform addresses common issues like incorrect bank information from vendors. Ramp provides a centralized system for vendor onboarding and bank account verification, minimizing errors and payment rejections.
• No processing fees: Ramp doesn’t charge any processing fees for domestic bill payments, helping your business save money on transaction costs.
• Versatile payment options: Choose between ACH, same-day ACH, credit card, check, or wire transfer. Ramp gives you unmatched flexibility to manage different types of vendor payments.

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Learn how Ramp’s expense management, corporate cards, and AP automation features save customers an average of 5% a year. Try Ramp.