Simplify and Streamline Your Financial Transactions with ACH Transactions

Apr 12, 2023 | ACH

Zil Money is a financial technology company, not a bank or an FDIC member. Zil Money offers banking services through partnership with FDIC member banks Silicon Valley Bank and Texas National Bank.

As the world shifts towards a digital economy, traditional money transfer methods can be time-consuming and frustrating. However, the Automated Clearing House (ACH) network has revolutionized this process by becoming an increasingly popular way to transfer money between banks. Zil Money offers an affordable way to make ACH transactions, making transferring money easier than ever. Keep reading to know more about ACH and how Zil Money can help you make ACH transactions simple.

What Is Electronic Fund Transfer (EFT)?

You can move money from one bank to another with an electronic fund transfer. Since there is no need for paper documents, the process goes much faster. Because of this, electronic bank transactions are easier to use than other ways to pay.

An electronic fund transfer, or EFTS, is when you use a computer to move money from one bank account to another. They can be done completely without any help from bank employees. Since these are digital transactions, there is no need for paper records.

Automated Clearing House (ACH) Definition

In the United States, the Automated Clearing House (ACH) is a network for sending and receiving money electronically. Electronic payments include things like ACH payments that are made online. Bill payments and direct deposits are made with them. ACH is also used in a number of business situations.

The National Automated Clearing House Association, or NACHA, is in charge of the ACH network. This network lets banks send money quickly and safely from one account to another.

Types of ACH money transfers

There are two kinds of payments made through the automatic clearing house. Both of these types of processes do the same thing, but they cost and take different amounts of time. Here’s what they are:

ACH credits:

Both the person paying and the person receiving the money must agree for an ACH credit to be made. Once both sides of the authorization have been completed, the transaction can be completed manually or set up as a recurring payment.

ACH debits:

An ACH debit takes money from the account being paid. This means that the person receiving the funds initiates the payment (the payee). It is a common method for businesses to recover money owed to them. Businesses can employ the terms “autopay” or “ACH” instead of the term “ACH debit” when dealing with customers.

Same Day ACH

In 2015, NACHA decided to reduce ACH processing times. ACH transfers had previously taken two to five business days to process. Following years of lobbying from customers and industry experts, the governing body voted to move forward with a “same-day ACH” campaign.

In 2015, NACHA approved a plan to introduce two new settlement windows per business day: 1:00 p.m. EST and 5:00 p.m. EST. These two new timeslots have been added to the existing 8:30 a.m. EST slot.

Advantages of ACH  

  • Convenience  
  • Easier recurring billing  
  • Preferred funding compared to checks  
  • Fewer disputes  
  • More secure  
  • Environmentally friendly  

Disadvantages of ACH  

  • Slow process  
  • Limitation on the transfer amount  
  • Cutoff times  
  • Lack of International payments 

The Penalty Fee for Rejected ACH Transaction

If your business got an online ACH payment rejected, you might be required to pay a fee. Try to resolve the issue as soon as possible to avoid paying additional monthly fees. To avoid this problem, you might only accept ACH payments from customers you know and trust.

Some ACH transactions are denied; why?

  • R01- Insufficient funds: This indicates that the customer did not have enough money in their report to cover the amount of the debit entry.
  • R02 -Closed bank account: This occurs when a customer has an account with your company but closes it.
  • R03-No bank account or inability to locate one: This code is used if the information you entered (your name or account number) does not match what the bank has on file.
  • R29- Rejected: You will receive this rejection code if a bank rejects your request to withdraw money from someone’s account.

How Safe Is ACH?

According to the NACHA standards, all parties involved in online ACH payments (paying businesses and third-party processors) should follow security requirements, procedures, and controls. Banking data (such as account numbers and routing addresses) must also be sent using “commercially reasonable” technology.

This means that if you use an unsecured email service or an inadequately secured web server, you will be unable to receive or transmit bank data. Ascertain that your ACH processor uses up-to-date encryption technologies and procedures.

If you’re looking for an affordable and convenient way to handle your financial transactions, Zil Money is the solution for you. Our user-friendly platform allows you to make ACH transfers between clients or payees on a one-time or recurring basis. Additionally, Zil Money offers comprehensive solutions for bill payments and payroll, making it the ideal all-in-one resource for your business’ financial needs. So, why wait? Open an account and enjoy the benefits.

Get in Touch

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Po Box 6543, Tyler TX 75711

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