The use of the Automated Clearing House (ACH) payments is an excellent model for effective, efficient and low cost disbursements and collections.
ACH adoption continues to grow as an increasing number of companies find more ways to incorporate the use of these payments into their cash flows. The overwhelming use remains direct deposit of payroll, although with the growing acceptance of bill pay services and the convergence of check with ACH, companies are finding that they are the recipients of ACH collections in greater numbers than ever before. ACH serves as an effective disbursement tool for employee reimbursements, vendor payments, tax payments and child support. On the collection side, automatic debit programs with customers for payment of subscriptions, dues and memberships have long been shown to be efficient and highly cost-effective. With the recent introduction of the International ACH Transaction (IAT) and the growing number of ACH systems in countries across the globe, ACH is emerging as the pervasive method for cross-border payments.
Access to the ACH is becoming easier and more streamlined. The primary access is through direct file transmission from the company or a trusted third party, such as a payroll provider. The second most common access for a company is through the online banking channel. Indirectly companies can access the ACH through bill pay services, which translate the payment order to an ACH for the more predominant receivers, while continuing to generate checks to smaller suppliers/recipients. For online shoppers a growing payment alternative to credit cards is the ACH (WEB) and, of course, many checks deposited today are converted to ACH transactions rather than check images or paper check deposits.
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