Best ACH Payment Processing for Small Business

Feeling overwhelmed by the variety of options when trying to find the best ACH payment processing for a small business? You’re not alone. With so many companies offering ACH payments online, knowing which one is right for your business can be difficult.

This article does not list every ACH payment processing option on the market.

Instead, it compiles the most suitable ACH payment processing solutions for small businesses.

But how did we get there?

Before getting into the details, let’s take a step back and review the basics of ACH payments.

 

Key Takeaways:

• ACH payments are electronic transfers of funds between bank accounts.
• Examples of ACH payments include direct deposits, bill payments, and online purchases.
• ACH payments typically take 2-3 business days to process.
• ACH payments differ from wire transfers in speed, cost, and security.
• ACH payment limits vary by bank, ranging from a few thousand dollars to millions.
• Many online businesses and retailers accept ACH payments from customers.
• When choosing an ACH payment processor for a small business, consider factors like customer service, ease of setup, success rates, relative expense, target market, and unique features.

With that knowledge, let’s look at what to look for when evaluating the best ACH payment processing for small businesses.

 

What Is an ACH payment?

An ACH (Automated Clearing House) payment is an electronic financial transaction that transfers funds between banks and financial institutions within the United States.

It’s similar to a wire transfer but typically takes fewer days and is less expensive.

Without this payment, transferring money between bank accounts would take weeks and cost much more.

Plus, ACH payments are considered very secure and reliable due to the multiple layers of security used.

 

 

Examples of ACH Payments

• Payroll direct deposits: When the next payday rolls around, employers transfer employee salaries straight to their bank accounts using ACH payments.
• Bill payments: Utility companies, credit card companies, and even subscription services like Netflix all use ACH payments for regular payments.
• Online purchases: Customers can make purchases on retail websites without ever having to enter a credit card number with the help of ACH payments.
• Government payments: The U.S. government uses ACH transfers to distribute Social Security, unemployment benefits, and tax refunds, among other things.
• Donations: Charities and other nonprofit organizations often use ACH payments for their donations.

ACH payments are the backbone of modern financial transactions; these transfers make up the majority of all transactions in the U.S.

 

How Long Does an ACH Payment Take to Process?

ACH payments typically take 2-3 business days to process, although some banks may take longer to clear the funds.

The exact timing of an ACH payment depends on several factors, including the time of day the payment is initiated, the size of the payment, and the banks involved in the transaction.

However, ACH payments are generally much faster than paper checks and wire transfers.

 

What Is the Difference Between ACH and Wire Transfer?

ACH payments and wire transfers are both methods of transferring funds electronically between bank accounts, but there are some key differences between the two:

 

Category	ACH Transfer	Wire Transfer
Speed	1-2 business days	Same-day or within a few hours
Cost	Typically low-cost or free	Fees range from $15 to $50 per transfer
Reversibility	Possible to reverse under certain cases	Non-reversible
Transaction Type	Domestic and international (limited)	Domestic and international
Transfer Limit	Generally lower limits	Higher limits, often no limit
Security	Secure, with multiple verification steps	Highly secure, with strong encryption
Volume	High volume transactions	Lower volume transactions
Reliability	Less reliable than wire transfers	More reliable
Use Case	High volume transactions
Processing	Batch processed	Processed individually
Initiation	Online, phone, or in-person	Online, phone, or in-person
Recurring Payments	Easily set up recurring payments	Not designed for recurring payments
Bank Network	Local ACH network, NACHA in the U.S.	SWIFT, Fedwire, CHIPS
Tracking	Limited tracking capabilities	Detailed tracking and confirmation

 

 

What Is an ACH Payment Limit?

The ACH payment limit is the maximum amount of money that can be transferred in a single transaction using the ACH system. These limits vary based on the financial institution and the type of account involved.

Factors Affecting ACH Payment Limits

• Financial Institution: Different banks and credit unions have policies and limits for ACH transfers. It’s essential to check with your financial institution to determine the exact limits of your account.
• Account Type: The type of account, whether personal or business, can also impact the ACH transfer limit. Business accounts typically have higher limits compared to personal accounts.
• Transaction Type: ACH transfers can be categorized into incoming (receiving money) and outgoing (sending money) transactions. Some banks impose different limits on these transaction types, with outgoing transfers often having lower limits.
• User History and Relationship: Long-standing customers with a good banking history may be granted higher ACH transfer limits. This can vary based on the bank’s discretion and the customer’s relationship with the financial institution.

Typical ACH Payment Limits

While specific limits depend on the factors mentioned above, here are some general ranges for ACH payment limits:

Personal Accounts: ACH transfer limits can range from $1,000 to $10,000 per day or transaction for most personal accounts. Some banks may allow higher limits for customers with a strong banking history.

Business Accounts: ACH transfer limits for business accounts tend to be higher, ranging from $10,000 to $100,000 per day or transaction. Again, these limits may vary depending on the financial institution and the customer’s relationship with the bank.

To determine your exact ACH payment limits, it is best to consult your financial institution or review your account’s terms and conditions. Keep in mind that these limits can be subject to change, so it’s essential to stay up-to-date with your bank’s policies.

 

Who Accepts ACH Payments Online?

Many businesses and service providers accept ACH payments online as a cost-effective, secure, and convenient payment method. Here are some examples of entities that commonly accept ACH payments online:

• E-commerce Stores: Many online retailers and e-commerce platforms accept ACH payments for purchasing goods and services. This is often done through payment gateways that support ACH transfers.
• Utility Companies: Gas, electricity, water, and other utility providers often accept ACH payments for bill payments. This makes it easy for customers to set up recurring payments for their monthly bills.
• Financial Institutions: Banks, credit unions, and other financial institutions accept ACH transfers for loan payments, credit card payments, and transferring funds between accounts.
• Subscription Services: Streaming services, software-as-a-service (SaaS) platforms, and other subscription-based businesses often accept ACH payments for recurring billing, making it convenient for customers to pay their monthly or annual fees.
• Government Agencies: Local, state, and federal agencies may accept ACH payments for tax payments, fines, fees, and other transactions.
• Educational Institutions: Schools, colleges, and universities often accept ACH payments for tuition fees, room and board, and other expenses.
• Nonprofits and Charitable Organizations: Many nonprofits and charities accept ACH payments for donations, memberships, and event registrations.
• Insurance Companies: Insurance providers often accept ACH payments for premium payments, allowing policyholders to set up automatic payments.

From small businesses to large enterprises, ACH payments are becoming increasingly popular due to their convenience and cost-effectiveness.

Check with your payment processor to find out if they offer ACH processing services and the requirements for using them.

 

Factors Small Businesses Should Consider When Choosing an ACH Payment Processor

When choosing an ACH payment processor for your business, you must consider various factors to ensure the best fit for your needs. Here are some key factors to keep in mind when evaluating ACH payment processors:

• Customer Service: Efficient and responsive customer service is crucial for addressing any issues or questions during payment processing. Look for a processor that offers reliable support through various channels, such as phone, email, or live chat.
• Ease of Setup: Integrating the ACH payment processor with your existing systems, such as your website or accounting software, should be straightforward and user-friendly. Look for a provider that offers clear documentation, integration guides, and developer resources to simplify the setup process.
• Success Rates: A high success rate for ACH transactions is essential for ensuring smooth payment processing. Research the processor’s performance and reputation in the market to gauge their success rate in processing ACH payments.
• Relative Expense: Compare various ACH payment processors’ fees and pricing structures. Some processors charge a flat fee per transaction, while others may have a percentage-based fee structure. Consider additional costs, such as setup fees, monthly fees, or hidden charges.
• Target Market: Choosing a processor that caters to your target market’s specific needs is crucial. For example, if your business primarily serves international customers, you’ll need a processor that supports international ACH transactions or offers alternative payment methods.
• Unique Features: Different ACH payment processors may offer unique features that set them apart. These can include fraud detection, advanced reporting tools, or the ability to process recurring payments. Evaluate these features to determine which processor best aligns with your business requirements.

Taking the time to carefully consider these factors can help you find the best ACH payment processor for your small business needs.

 

What to Look for in the Best ACH Payment Processing for Small Businesses

Not all ACH payment processors are created equal. While some pride themselves on providing the best customer service, others may offer advanced payment automation capabilities.

Instead of looking out for each individual feature, we’ve analyzed the market and identified nine major categories to help you identify the best ACH payment processor for your small business:

Best for Affordable and Transparent Pricing: GETTRX

• Pricing: Flat subscription with no extra charges
• Monthly fees: $29 per month
• Transaction fee: None

While several other ACH payment processing providers offer competitive rates, GETTRX stands out for its affordable and transparent pricing. The platform offers a fixed monthly fee with no hidden fees or contracts.

In addition to its competitive pricing, GETTRX provides industry-leading customer support. The platform offers 24/7 live chat and phone support, ensuring you’ll always have access to help when needed. Plus, their fraud protection features are powered by machine learning algorithms that help keep your customer’s data secure.

Pros:

• Fast Approval
• Affordable and transparent pricing with no hidden fees or contracts
• 24/7 live chat and phone support
• Industry-leading fraud protection features powered by machine learning algorithms

Cons:

• No international payments accepted
• Limited customization options for checkouts.

Best for New Small Businesses: Square Invoices

• Pricing: Flat rate
• Monthly fees: $0 to $20 per month
• Transaction fee: 1% with a $1 minimum

Square is a widely-used small business management platform that offers various services, such as ACH payment processing, a point-of-sale (POS) system, and standard reporting features.

Square Invoices processes ACH payments exclusively, with a free basic plan. You can also add unlimited invoicing and estimation capabilities. And, thanks to that intuitive dashboard, you can track invoices, estimates, cash flow, and payments and send automated payment reminders to clients.

Pros:

• Low fees
• Easy setup process
• Developer tools and API

Cons:

• Limited customer support (no phone or live chat)
• No cap on the ACH fee

Best for ACH Payments Only: GoCardless

• Pricing: Per transaction
• Monthly fees: $0 to $75 per month
• Transaction fee: 1% + $0.25

While every other payment provider is diversifying their services, GoCardless is focusing exclusively on ACH payments. This makes it the go-to choice for businesses that need to process only direct debits and credits.

GoCardless’s intuitive dashboard offers an easy way to manage your customers and transactions, while its simple API helps you integrate ACH payments into your website or app.

Pros:

• Easy integration with websites and apps
• Transparent pricing structure
• Fast payment processing times

Cons:

• No card payments are accepted; most customers prefer to pay with cards.
• Extra fee for higher transactions

Best for Easy Merchant Approval: BlueSnap

• Pricing: Monthly subscription + per transaction
• Monthly fees: Contact for a quote
• Transaction fee: from  2.9% + $0.30 per transaction

BlueSnap offers an easy approval process and low fees, making it a popular choice among merchants just starting out with ACH payments.

Another great feature of BlueSnap is how they’ve integrated 100+ currencies, plus 100+ payment types and eWallets across 47 countries. This makes it a great option for businesses that want to accept international ACH payments.

Pros:

• Easy merchant approval process
• Supports 100+ currencies and payment types across 47 countries

Cons:

• Complex pricing structure
• Basic reporting tools and customer service options (no phone or live chat)
• No advanced payment automation features

Best for Customizing Checkouts: Stripe

• Pricing: Flat-rate fee
• Monthly fees: None
• Transaction fee: 0.8% with a $5 cap

Stripe is the go-to choice for businesses who want to customize their checkout process. The platform offers a range of advanced features that allow you to tailor the checkout experience to meet your customers’ needs.

Stripe also offers a range of payment automation features, such as automatic refunds and recurring payments. This makes it easy to offer subscription-based services and manage customer relations.

Pros:

• Advanced customization options for checkouts
• Powerful payment automation features
• Low transaction fees

Cons:

• Charges for failed ACH payments
• Requires some tech skills to implement

Best for High-Risk Businesses: PaymentCloud

• Pricing: Unavailable
• Monthly fees: Unavailable
• Transaction fee: Unavailable

PaymentCloud is specifically designed to handle dynamic, high-risk transactions. From dropshipping to online gambling, adult content, nutraceuticals and arms, PaymentCloud is the preferred choice for businesses that require a reliable payment processor.

The platform offers a robust security system and advanced fraud management tools, so you can rest assured that your customer’s data is protected. The fraud protection feature is powered by machine learning algorithms that constantly monitor transactions to detect suspicious activity.

Pros:

• Robust security features with advanced fraud prevention tools
• Suitable for high-risk merchants
• Hardware plus developer tools and API

Cons:

• Long-term contracts likely required
• Secret pricing
• Limited customer support

Best for Lowest ACH Payment Rates: Helcim

• Pricing: Interchange Plus
• Monthly fees: None
• Transaction fee: 0.5% + $0.25

Helcim is ideal for businesses that process a high volume of direct debit and credit payments. The platform offers competitive rates with no hidden fees or contracts. Plus, their Signature feature lets you customize the checkout experience by adding branding elements like logos and colors.

Helcim also provides detailed reports and analytics, enabling you to monitor your transactions and keep track of customer data.

Pros:

• Competitive ACH payment rates with no hidden fees or contracts
• Customizable checkout experience
• Detailed reports and analytics
• No longterm contracts

Cons:

• No capped rate or flexible plan
• Charges for failed ACH transactions

Best for Negotiating Rates: Flagship Merchant Services

• Pricing: Custom pricing
• Monthly fees: Contact for a quote
• Transaction fee: Contact for a quote

Flagship Merchant Services is ideal for businesses that want to negotiate their ACH payment rates. The platform offers a transparent rate structure, allowing you to negotiate the best possible deal for your business. They also offer discounts to businesses that process a high volume of payments.

Flagship is known for its excellent customer service, with dedicated account managers and 24/7 phone support. They also provide comprehensive reporting tools and fraud prevention features.

Pros:

• Uses popular payment gateway Authorize.net
• Can negotiate for rates
• Detailed reports and analytics

Cons:

• No public pricing or estimation
• No advanced automation or API features

Best for Established Businesses: Stax by Fattmerchant

• Pricing: Flat subscription
• Monthly fees: From $99 per month
• Transaction fee: Unavailable

Stax by Fattmerchant is the perfect choice for businesses that have been around for a while and are looking to save money on their ACH payments. The platform offers competitive rates with no hidden fees or contracts. Their Flexible Payment Platform offers advanced automation features and custom checkout options.

Stax also provides detailed reporting tools and fraud protection features, ensuring your customers’ data remains secure.

Pros:

• Zero markups on ACH and credit card payments
• Detailed reports and analytics
• Advanced API integrations

Cons:

• No international payments accepted
• Not 100% transparent on costs
• Limited to $500,000 in sales annually

 

FAQ on ACH Payment Processing for Small Businesses

Why should a small business consider ACH payment processing?

ACH payment processing offers several benefits for small businesses, including lower transaction fees, the ability to process recurring payments, and improved cash flow management. By accepting ACH payments, small businesses can cater to a wider range of customer preferences and streamline payment processes.

Which ACH payment processors are best for small businesses?

Some popular ACH payment processors suitable for small businesses include:

• GETTRX
• Stripe
• Square
• Authorize.Net
• PayPal
• QuickBooks Payments
• Dwolla

The best processor for your small business will depend on your specific needs and priorities, such as transaction volume, target market, and integration requirements.

How can a small business set up ACH payment processing?

To set up ACH payment processing, follow these steps:

Choose a reliable ACH payment processor that meets your business requirements.

Create an account with the processor and provide the necessary business and banking information.

Integrate the processor’s payment gateway or API with your website, e-commerce platform, or accounting software.

Test the integration to ensure that ACH transactions are processed smoothly and securely.

Start accepting ACH payments from your customers.

Are any risks associated with ACH payment processing for small businesses?

While ACH payment processing is generally secure and reliable, there are some risks to consider, such as transaction reversals due to insufficient funds, closed accounts, or unauthorized transfers. To mitigate these risks, ensure that your payment processor offers robust fraud detection and security features.

Can a small business accept international ACH payments?

Some ACH payment processors support international ACH transactions, allowing small businesses to accept payments from customers in other countries. However, these transactions may be subject to additional fees, regulatory requirements, and longer processing times. Verifying whether your chosen processor supports international ACH payments and understanding any associated costs and limitations is essential.

 

Final thoughts

Choosing the best ACH payment processing for small businesses requires careful consideration of your business’ needs and goals.

Each provider offers different features and pricing structures, so comparing the various options is important before deciding.

Ultimately, finding the right processor will depend on factors like budget, the payment volume, fraud protection needs, and customer service requirements.

With careful research and an understanding of the features available from each provider, you can find the best ACH payment processing for your small business.

For more information on ACH Payments, check out these resources: What is an ACH Network, ACH vs Wire Transfer & Best ACH Payment Processing for Small Businesses