Big Data Makes ACH Payment Viable for Small Businesses

ACH transactions offer a lot of benefits for small businesses and wouldn't have been possible without big data.

big data makes ach payments viable for small businesses
Photo 132360431 / Ach © Piotr Swat | Dreamstime.com

Big data technology has led to some major changes in the banking sector. Many of the changes have been beneficial for small businesses.

One of the biggest benefits of big data has been the development of ACH payment processing. Many businesses can benefit from it if they use it correctly.

Big Data Leads to Great Opportunities for Businesses Relying on ACH Transactions

ACH stands for Automated Clearing House, which is a financial network in the US that facilitates bank-to-bank electronic money transfers. The ACH network is managed, updated, and governed under the rules and guidelines set forth by the National Automated Clearing House Association (Nacha). As a money transfer system, ACH is suited to businesses, consumers, and governments alike for both national and international transactions.

At the same time, businesses do have more than their fair share of choices for accepting payments these days. So, the question is this; are there sufficient reasons for such an establishment to start with ACH now? The answer is yes, and the following points should help shed more light on why.

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The process has become a lot easier due to advances in big data. ACH systems require vast amounts of data to handle transactions. Big data systems make it easier for them to operate seamlessly.

Here are some of the benefits that data-driven ACH systems have created for small businesses.

Cheaper than Card Payments

Depending on the associated bank accounts and the amount being transferred, the fee structures will vary. However, ACH transactions are almost always considerably cheaper than credit card transactions because credit card providers usually charge a significantly higher base fee by default. This is possibly one of the biggest advantages that big data has created for business owners throughout the world.

It should be duly noted here that there are two different types of ACH payments.

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  • ACH Credit or Push Transfers: The customer pushes funds towards the business’s bank account.
  • ACH Debit or Pull Transfers: The business pulls funds from the customer’s bank account.

As a business owner, you will likely find ACH Debit or pull transfers to be faster, and more secure. They are also likely to be cheaper, as compared to an ACH credit transfer.

Fast, Verified, and Secured Money Transfers

Bank to bank transfers via the ACH network can be verified and completed much faster with automation software integration. For example, the Yodlee ACH payments solution is widely used for account verification, fraud detection, risk management, bank reconciliation, recurring payment collection, and same-day transfers by businesses of every size and stature across the United States. As a Nacha-preferred partner, Yodlee ACH payments can simplify the process without sacrificing efficiency, security, or speed.

Less Expensive and More Secured than Checks

Since the Automated Clearing House network does not allow for common errors associated with manual entry and misplacement (lost checks), it automatically puts it ahead of traditional checks. Post integrating an ACH verification and payment system, ACH transfers also gain protection against fraudulent attempts. Checks, on the other hand, are a lot more susceptible to physical tampering.

Any business that needs to write checks often knows that the total cost of those checkbooks can look steep by the end of a financial year. ACH electronic payments can effectively eliminate that expense. Establishments can save a few trees, reduce their overall carbon footprint, and save their own money by skipping paper checks as much as possible.

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ACH payments were so popular in 2021 that the network saw over $72.6 trillion being transferred. The total amount in transactions for 2022 is projected to grow significantly on top of that. Since an increasing number of businesses are getting to know about the benefits of using ACH payments, it does make a lot of sense.

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Big Data Makes ACH Transactions Ideal for Small Businesses

Small businesses stand to benefit considerably from big data. One of the biggest advantages of big data is that it has led to the inception of new ACH systems. These are cheaper and more convenient for many banking applications small businesses face.

By Andrew Oziemblo, Founder & CEO of Chicago SEO Geeks, the digital marketing & SEO agency helping businesses achieve long-term growth goals.