There’s been much debate about the security of ACH. As a processor trying to convey the benefits of incorporating ACH into a website, we often get questioned on the supposed lack of security surrounding ACH processing.
Automated Clearing House (ACH) is an electronic payment network for financial transactions that enables electronic payments. Basically, instead of entering a credit card number, a consumer is able to enter his/her checking account information; it’s like paying with an electronic check. More and more businesses, individuals, financial institutions, and government organizations are taking advantage of ACH processing, due to its undeniable benefits.
We know what you’re thinking: “But, I already accept credit cards, I’m not familiar with ACH, and I don’t have time to change my website right now.”
Although cyber thieves can steal credit card numbers (and the cards themselves), the main security advantage to using a credit card portal online is the fact that the consumer must first enter the CVV code. This security code is what allows the merchant to accept the payment, and assume that the card is in the hands of the rightful owner.
…. So why would you use ACH?
The BIG benefit: Typically, when working with the right company, you can save 50 to 90% in processing fees by using ACH instead of credit cards. You’d almost be crazy to NOT take advantage of these savings, right?
The BIG question: But how secure is ACH?
ACH can be secure as well! For the most secure ACH portal, a merchant needs to set up micro validation. This means that when a consumer wants to make a purchase, he or she must first sign up for an account on the merchant’s site. This might include entering his/her name, account information, email, etc. (You know what these accounts/profiles look like; think of someone having an account on Amazon.com, or other E-commerce sites.) After the consumer enters his or her bank account information, the processor makes micro deposits into the consumer’s bank account. After verifying the amounts deposited, the consumer is then free to make purchases on the site by using his or her checking account information. The micro deposits are used to prove that the consumer actually does have access to the bank account being used for the purchases.
Although this process adds security to the transaction, it does cost the merchant time in changing his/her website to set up the micro validation process. Again, however, the major benefit to taking the time to include ACH is the unbeatable savings.
Most merchants would agree that repeat business is good. Usually, companies that opt for incorporating ACH processing into their websites are those that have repeat customers. These merchants make it a point to create relationships with customers, and customers enjoy returning time and time again when purchasing items online. As an added bonus to being secure, ACH gives those returning customers a convenient payment option.
Here are the verticals in which we offer ACH processing:
- Nonprofit organizations
allowing people to make repeating/scheduled donations
- Debt collection agencies
allowing for recurring payments
- High risk merchants
allowing for repeat customers to make purchases easily
- Professional transportation companies
allowing for repeat customers (lucky!) to make purchases easily
Check out other blogs on ACH processing: