ACH Payment Processing for eCommerce

Placeholder ACH Payment Processing for eCommerce

For the fourth consecutive year, ACH payment processing volume has increased by over 1 billion dollars! Get in on the action and see how ACH acceptance can help boost your online business.

How are consumers making payments online?

According to the 2016 Annual Billing Household Survey, consumers use 3 to 4 different payment methods each month. 

Credit card payments and debit card payments are by far the most common methods of payment, yet ACH is an increasingly popular option. 

The more payment methods a merchant can support, the better overall customer experience they can provide. 

Let’s dive into the world of ACH.

Warning: Acronym overload ahead! An Automated Clearing House (ACH) payment is an electronic, bank-to-bank transfer processed by the National Automated Clearing House Association (NACHA), the governing body of all things ACH. According to NACHA , ACH transferred almost 23 billion electronic payments over the ACH network in 2018. 

In simplest terms, ACH is a consumer payment method that businesses can use to directly debit, or in some cases, credit a consumer bank account. ACH transfers are sometimes compared to a wire transfer, but they are not the same. Wires typically do not use a clearing house and are often irreversible. Regardless, consumers must consent to ACH credits and debits prior to them being initiated.

ACH use is trending upward as consumer buying habits continue to trend towards online purchasing. NACHA reported an increase of 9.5% in ACH payments in Q3 of 2019, up from the previous year . According to Invesp, approximately 62% of US consumers with Internet access shop online (retail) at least once per month. Numbers are on the rise as online shopping continues to offer and improve upon easy checkouts, free shipping, the variety of products available, and the ease of making returns. Imagine how that number will rise as more online businesses adapt ACH acceptance.

ACH has solidified itself as a convenient payment method in a variety of scenarios outside of online shopping, including:

  • Consumer paying water bill directly from their checking account via a provider’s website
  • Recurring direct deposit from an employer
  • Consumer transferring funds from their money market account to their checking account
  • Business paying another business for services or supplies
  • Paying a friend through Venmo or PayPal 

Why offer ACH as a payment option?

It’s easy to see why usage is on the rise. For consumers, ACH payment processing is one of the safest ways to transfer money. Since all transfers are electronic, there are fewer manual processes and fewer people viewing sensitive information, making the payments process safer and less prone to error.

ACH payments are the third most popular payment method for consumers and are cost effective for merchants. We’ll dive deeper into these benefits below.

Almost anyone can accept ACH

There are no restrictions to the types of businesses that can accept ACH payments; however, those who sell products or services online are an ideal candidate. 

The United States has experienced an explosion of online sales in recent years. The U.S. Department of Commerce estimates that consumers spent $517 billion online in 2018 with U.S. merchants which was a 15% growth over 2017 and accounted for half of all growth in retail sales. Additionally, it is estimated that there were 220 million online shoppers in the U.S. during 2018 with the expectation that this number will reach 230 million by 2021. 

While Ecommerce accounted for 14.3% of all retail sales in 2018, according to Digital Commerce 360, nearly half of American small businesses do not have an online presence. This suggests a significant growth opportunity for payment providers as more small businesses shift to an online shopping experience.

X-Cart users can take advantage of accepting ACH payments in their stores easily with Paya Service’s ACH add-on available in X-Cart App Store. Adopt the progressive payment method now.

ACH is great for online purchases

There are many advantages to offering ACH as a payment method for online stores. 


The processing cost associated with accepting ACH payments is typically lower than any other payment method, as it does not require typical processing fees. ACH eliminates labor costs for check handling and avoids costly banking fees. Additionally, many ACH payment processing companies offer the option for merchants to pass ACH processing costs on to the consumer, resulting in a no-fee processing option.

No expiration

Bank accounts do not expire or change with the frequency that cardholder information does, so businesses experience fewer declines with ACH than with credit or debit card transactions.

Convenience for consumers and merchants 

Support for a variety of payment types is increasingly important for consumers, so an ACH option may contribute to a better online experience. With ACH in place, merchants benefit from funds being more quickly deposited into their business bank account. 

Payment security 

The consumer, and their checking account, can be instantly screened through a variety of fraud detection systems which reduce the likelihood of high-risk transactions being processed. In cases of non-sufficient funds (NSF) for otherwise low-risk accounts, payments will be re-tried automatically to improve business continuity. 

Fast processing

No matter how merchants process transactions, ACH allows them to initiate credit and debit settlement on the same day. This solution only applies to US-based transactions under $25,000. Debits, specifically, may occur the next day in accordance with NACHA guidelines. 

Additional ACH insight

While we’ve reviewed the ease and cost-effectiveness of ACH acceptance, there are a few key facts to keep in mind when it comes to processing ACH transactions. ACH transactions can be subject to daily limits and often apply to domestic transactions only. Much like credit card processing, ACH debit processing after specific batch cut offs will be processed with the next batch and can impact funding times (adding to the number of business days it takes to get funded).

ACH transactions also can be susceptible to ACH returns rules, meaning the transaction cannot be processed. This can happen for a great number of reasons, such as insufficient funds, account closed, or stop payment. There are tools available from ACH payment service providers like Paya Services that can help reduce the number of ACH rejects incurred by a merchant. For example, Paya Services automatically resubmits transactions two more times after the initial return, thus increasing the rate of successful processing.

Additional tools include:

  • Level 1 – Check Verification
    • Verifies the customer’s driver’s license and bank account against a national database of fraudulent checkwriters
  • Level 2 – Advanced Account Validation
    • Verifies a customer’s bank account is open and has at least $1.00 available
  • Level 3 – Identify Verification
    • Verifies a customer’s identity using the year of birth or last 4 digits of the social security number

Accepting ACH payments can also happen in-store

There are various options for processing paper checks or ACH in brick and mortar locations with a physical terminal, Point-of-Sale (POS) system, payments gateway integration, browser-based Virtual Terminal, or PC-based Desktop Terminal software. With any of these options, it is easy to track processed transactions between the brick and mortar and online stores. 

Reporting is available 24/7 and can be accessed via automated email, FTP delivery, or an online reporting interface. Training from a knowledgeable support representative is also available to help merchants learn more about managing data, monitoring fraud, and tracking revenue. ACH solution providers, such as Paya Services, offer all of this and more, often at no extra cost.

Now that you’ve learned the benefits of offering ACH as a payment option, read how FlexShopper, a financial and technology company, successfully launched their online store using ACH as the preferred payment method. 

An ACH implementation success story: FlexShopper Interview with CFO Russ Heiser 

Who is FlexShopper?

FlexShopper is a financial and technology company offering e-Commerce and payment options for rental purchase agreements to 50 million sub-prime consumers – those who typically would not be approved for a credit card or may not have cash available to purchase or rent durable goods. 

By enabling merchants to sell to high-risk consumers, FlexShopper disrupted the Lease-To-Own (LTO) space of the past and moved it into the digital age. When selling to this demographic, FlexShopper pays 100% of the retail price and removes risk from the merchant. Thus, allowing the consumer to shop online and in-stores for the merchandise they want or need.

What were FlexShopper’s challenges prior to offering ACH as a payment option?

As reported by the FDIC Unbanked Household Survey in 2015 (link -), 7% of Americans do not have a bank account compared to 24% of consumers who do not have a credit card.

Driven by these statistics, FlexShopper offered ACH as a payment option with the launch of their online store. Since more consumers have a checking account versus a credit card, it would offer an easier approval process.

When a new consumer signs up with FlexShopper, they must pay via ACH. Once the consumer has established a positive payment history with FlexShopper, additional payment options such as credit and debit cards are offered as payment options. 

What was the impact to FlexShopper’s overall business by offering ACH in your online store?

Given that the majority of FlexShopper’s consumers lack upfront cash or credit to make purchases in traditional marketplaces such as Best Buy or Amazon, FlexShopper determined ACH necessary as a payment option for their online store launch and vital to the growth of the overall business.

By offering ACH as a payment option, it provided FlexShopper the foundation for a successful launch by maximizing revenue potential. Additionally, recurring payments allowed them to better identify the use of prepaid cards with ACH identifiers and create their own blacklist.

How important was it for FlexShopper to offer an omni-channel experience for the organization and your customers? 

ACH played an important role in the omni-channel offering. While FlexShopper does not have a brick and mortar store, it was important for the website to be user friendly on both desktop and mobile devices. Providing an atmosphere for a positive consumer experience laid the foundation for consumers making on-time payments and therefore, stabilizing the revenue stream. 

What percentage of FlexShopper’s consumers pay via ACH compared to other payment methods? Did this have any impact on revenue? 

Since FlexShopper’s online store launched with ACH payment capabilities, calculating the specific revenue growth due to ACH is difficult. However, ACH as a payment solution was a vital aspect of our successful online store launch and we believe a significant portion of the online store revenue is a direct result of the ACH payment offering. 

 Approximately 55% of FlexShopper’s payments are ACH. For FlexShopper’s consumers, paying via ACH has been the preferred payment method.

Simple ACH acceptance setup with X-Cart and Paya Services

X-Cart, an Ecommerce software provider, has integrated with Paya Services’ ACH solution to offer quick and simple ACH payment acceptance for online stores. 

If you have an existing Paya Services account, simply download the Paya Services ACH module from the marketplace, turn the payment method toggle from the “INACTIVE” status to “ACTIVE”. Then, enter the terminal ID and save any changes. 

Your online store is now ready to accept ACH payments!

NOTE: If you do not have an existing Paya Services account, contact for more information on offering check and ACH as payment options.

The consumer experience is even simpler

During “Secure Checkout” a consumer checks the option for “ACH / Bank Account”, enters their bank account information, agrees to the Terms and Conditions, and places their order.

Wrapping it all up

Offering a variety of flexible payment methods provides an all-around positive purchasing experience for consumers. Given the impressive rise in ACH payments, online or in-person ACH acceptance makes more sense than ever. ACH offers easy and cost-efficient payment acceptance that benefits both the merchant and the consumer.

Time to add ACH to your existing merchant account? Paya Services delivers modern payment solutions for businesses of all sizes and in all industries, even high-risk merchants, and we are integrated to hundreds of payment gateways, software, and point of sale systems. You can now easily process ACH transactions, and  accept payments from one place, while driving revenue and retention has never been easier. 

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