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ACH Processing Services

ACH Processing Services

ACH Processing Services | Electronic Payment Solutions for Business

Lower-Cost Payment Processing for Recurring Billing & Large Transactions

Accept bank payments directly from customer accounts at just 1%—significantly less than credit card processing fees. Coastal Pay’s ACH processing gives software companies, B2B businesses, and subscription services a cost-effective alternative for recurring billing, large transactions, and automated payment collection.

  • Accept Electronic Bank Payments: ACH debits, credits, and transfers
  • Simple Pricing: Just 1% per transaction—no monthly fees or hidden costs
  • Fast Settlement: Same-Day ACH or standard 3-4 business day funding
  • NACHA Compliant: Fully compliant with all ACH network rules and regulations
Calculate Your ACH Savings
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View API Documentation

What is ACH Processing?

ACH (Automated Clearing House) processing is a electronic payment method that transfers funds directly between bank accounts through the ACH Network. Unlike credit card processing that goes through card networks like Visa and Mastercard, ACH payments move money directly from your customer’s checking or savings account to your business bank account. 

ACH processing is ideal for recurring payments, subscription billing, large transactions, and any situation where lower processing costs matter more than instant authorization. Businesses save significantly on processing fees while customers enjoy the convenience of automatic payments without needing to update expired credit cards. 

How ACH is used:

  1. Monthly subscription billing for SaaS and membership businesses
  2. Utility and service provider automatic payments
  3. B2B invoice payments and vendor transactions
  4. Payroll direct deposits and contractor payments
  5. Government benefits and tax refunds
  6. Insurance premium collections

ACH Processing Services & Features

ACH Debit Processing

Pull funds directly from customer bank accounts for subscription billing, recurring payments, or one-time transactions. Perfect for SaaS companies, membership organizations, and service businesses collecting regular payments.

Use cases:

  1. Monthly, quarterly, or annual subscription billing
  2. Membership dues and recurring fees
  3. Installment payment plans
  4. Utility and service bills
  5. Loan and mortgage payments
  6. Insurance premium collection

Key features:

  1. Automated recurring payment schedules
  2. Customizable billing dates and frequencies
  3. Retry logic for insufficient funds situations
  4. Customer portal for bank account management
  5. Email and text payment confirmations
  6. PCI-compliant secure account storage

ACH Credit Processing

Send funds to employees, contractors, vendors, or customers. Streamline payroll, vendor payments, affiliate commissions, refunds, and customer disbursements. 

Use cases:

  1. Payroll and direct deposit
  2. Vendor and supplier payments
  3. Contractor and freelancer disbursements
  4. Affiliate and referral commissions
  5. Customer refunds and reimbursements
  6. Investment distributions

Key features:

  1. Batch processing for multiple recipients
  2. Scheduled payment delivery
  3. Same-Day ACH for urgent payments
  4. Payment status tracking and notifications
  5. Secure recipient bank account verification
  6. Detailed payment reporting and reconciliation

Same-Day ACH Processing

Need faster funding? Same-Day ACH settles in hours instead of days. Available for both debits and credits with multiple processing windows throughout the business day.

Settlement times:

  1. Morning window: Funds available by early afternoon
  2. Afternoon window: Funds available by end of business day
  3. Evening window: Funds available next morning

Best for:

  1. Time-sensitive vendor payments
  2. Urgent payroll corrections
  3. Fast refunds to improve customer satisfaction
  4. Last-minute payment collection before due dates
  5. Emergency fund disbursements

Pricing: $1.00 per Same-Day ACH transaction (still far less than credit cards)

Recurring ACH Billing

Automate subscription and membership billing with flexible scheduling options. Set up customers once and collect payments automatically on your schedule.

Billing options:

  1. Fixed amount recurring payments (monthly subscriptions)
  2. Variable amount billing (usage-based, metered billing)
  3. Custom intervals (weekly, bi-weekly, monthly, quarterly, annual)
  4. Trial periods with automatic conversion
  5. Pro-rated billing for mid-cycle changes
  6. Automatic billing date adjustment for weekends/holidays

Dunning management:

  1. Automatic retry for insufficient funds (configurable schedules)
  2. Smart retry logic that distinguishes NSF from closed accounts
  3. Automated customer notifications for payment issues
  4. Escalation workflows for failed payments
  5. Grace periods before service suspension

Benefits:

  1. Reduce involuntary churn by 15-20%
  2. Improve cash flow predictability
  3. Lower administrative costs
  4. Better customer retention
  5. Fewer billing-related support tickets

ACH Verification Services

Confirm bank account ownership before processing the first payment. Reduce fraud, prevent failed transactions, and improve customer experience. 

Instant Account Verification Real-time verification through secure bank login. Customers authenticate with their online banking credentials—no waiting for micro-deposits.

  1. xVerification completes in seconds
  2. Higher success rates than micro-deposits
  3. Better user experience
  4. Immediate payment processing

Micro-Deposit Verification Traditional method that deposits two small amounts (typically $0.01-0.50) into the customer’s account. Customer verifies by confirming the amounts.

  1. 2-3 day verification timeline
  2. Works with all banks
  3. No customer login required
  4. Industry-standard method

Prenote Verification Zero-dollar test transaction sent through ACH network to validate account details before actual payment processing. 

  1. Confirms account is active and able to receive ACH
  2. Takes 3-4 business days
  3. Required by some industries
  4. Reduces return rates

ACH Payment Gateway Integration

Connect ACH processing to your website, software platform, or application through our developer-friendly API.

Integration options:

  1. RESTful API with comprehensive documentation
  2. Webhooks for real-time payment status updates
  3. SDKs for popular programming languages
  4. Hosted payment pages (quick-start option)
  5. Pre-built integrations with major platforms
  6. Sandbox environment for testing

API capabilities:

  1. Initiate ACH debits and credits
  2. Store and tokenize bank account information
  3. Set up and manage recurring billing
  4. Verify bank accounts programmatically
  5. Retrieve transaction status and history
  6. Generate detailed reports

Developer resources:

  1. Complete API documentation
  2. Code examples and tutorials
  3. Postman collection for testing
  4. Dedicated developer support
  5. Test credentials and sandbox access
  6. Webhook testing tools

Virtual Terminal for ACH

Process ACH payments manually through our secure web-based terminal. Ideal for phone orders, manual billing, or situations where API integration isn’t necessary.

Features:

  1. Process one-time ACH payments
  2. Set up recurring billing schedules
  3. Store customer bank account information
  4. Generate payment links for email/text
  5. Upload batch files for multiple payments
  6. Export transaction reports

Access:

  1. Web-based (no software installation)
  2. Multi-user support with permissions
  3. Role-based access control
  4. Activity logging and audit trails
  5. Mobile-responsive interface

Batch ACH Processing

Process hundreds or thousands of ACH transactions simultaneously. Perfect for payroll, mass vendor payments, or high-volume billing operations.

File formats supported:

  1. NACHA file format (industry standard)
  2. CSV upload with automatic formatting
  3. Excel spreadsheet upload
  4. Custom file format mapping

Batch capabilities:

  1. Process unlimited transactions per batch
  2. Schedule batches for future dates
  3. Pre-validate files before submission
  4. Error checking and correction tools
  5. Batch status tracking
  6. Detailed batch reports and reconciliation

Use cases:

  1. Payroll processing for multiple employees
  2. Monthly billing for subscription businesses
  3. Vendor payment runs
  4. Mass refund processing
  5. Distribution payments to multiple recipients

ACH Processing Costs & Pricing

Simple, Transparent ACH Pricing: 1% Per Transaction

Unlike credit card processing with complex interchange categories and variable rates, ACH pricing is straightforward.

Our Rate: 1% per transaction 

  1. No monthly fees or minimums
  2. No setup fees or application charges
  3. No per-transaction caps (1% whether you process $100 or $100,000)
  4. No batch fees or settlement charges
  5. No PCI compliance fees
  6. No gateway fees or portal charges

Same-Day ACH: $1.00 per transaction (in addition to 1% rate)

ACH vs Credit Card: Cost Comparison

See how much you can save by offering ACH as a payment option:

Transaction Amount

$100

$500

$1,000

$2,500

$5,000

$10,000

Credit Card Cost (2.9% + $0.30)

$3.20

$14.80

$29.30

$72.80

$145.30

$290.30

ACH Cost (1%)

$1.00

$5.00

$10.00

$25.00

$50.00

$100.00

You Save Per Transaction

$2.20 (68% savings)

$9.80 (66% savings)

$19.30 (66% savings)

$47.80 (66% savings)

$95.30 (66% savings)

$190.30 (66% savings)

Monthly savings example:

100 customers at $2,500/month = $4,780 saved monthly = $57,360 saved annually

When Does ACH Make Financial Sense?

ACH is more cost-effective than credit cards when:

  1. Transaction amounts exceed $200-300
  2. You have recurring billing relationships with customers
  3. Processing B2B payments (businesses prefer ACH)
  4. Volume is high (savings multiply quickly)
  5. Cash flow timing is less critical than cost savings

ACH is more cost-effective than credit cards when:

ACH becomes cheaper than typical credit card rates around $150-250 per transaction, depending on your card processing rates. The larger the transaction, the more you save.

Additional ACH Fees to Understand

Return/NSF Fees When ACH payments are returned (insufficient funds, closed account, etc.), the ACH network charges a return fee.

Industry standard: $2-5 per return

Coastal Pay rate: [Add your specific rate here]

Common return scenarios:

  1. Insufficient funds (NSF) – typically retry-able
  2. Account closed – do not retry
  3. Stop payment placed by customer
  4. Invalid account number
  5. Authorization revoked by customer

Chargeback/Dispute Fees Unauthorized ACH debits that customers dispute through their bank.

Industry standard: $15-25 per dispute

Coastal Pay rate: [Add your specific rate here]

How to minimize returns and disputes:

  1. Verify bank accounts before first transaction
  2. Use clear, recognizable billing descriptors
  3. Send advance payment notifications
  4. Maintain proper authorization documentation
  5. Respond quickly to customer inquiries
  6. Monitor account velocity and patterns

How ACH Processing Works

The ACH Payment Flow

Step 1: Authorization & Initiation Customer provides bank account information and authorizes ACH debits. You (the originator) initiate the transaction through your ACH processor.

Step 2: Batching ACH transactions are grouped into batches and submitted to the ACH operator (Federal Reserve or The Clearing House).

Step 3: Network Processing The ACH operator sorts transactions and routes them to the appropriate receiving banks.

Step 4: Posting Receiving banks post debits or credits to customer accounts.

Step 5: Settlement Funds move between financial institutions and are deposited into your merchant account.

Step 6: Funding Funds become available in your business bank account.

ACH Settlement Timelines

Standard ACH:

  1. Day 1: Transaction initiated
  2. Day 2-3: ACH network processing
  3. Day 4: Funds available in your account
  4. Total timeline: 3-4 business days

Same-Day ACH:

  1. Initiated before cutoff time (varies by window)
  2. Funds available same business day or next morning
  3. Total timeline: Hours to 1 business day

Important notes:

  1. ACH only processes on banking business days (Monday-Friday, excluding bank holidays)
  2. Transactions submitted after cutoff times process next business day
  3. Settlement times are typical but not guaranteed
  4. Returns can occur up to 60 days after transaction (for unauthorized debits)

ACH Processing for Different Business Types

ACH Processing for SaaS & Subscription Businesses

Reduce processing costs and involuntary churn with automated ACH billing.

Why SaaS companies use ACH:

  1. Lower processing costs increase profit margins (especially critical for lower-priced SaaS)
  2. Bank accounts don’t expire like credit cards (reduce involuntary churn)
  3. Customers prefer “set it and forget it” automatic payments
  4. Better for annual plans where credit card processing fees are substantial
  5. Reduced PCI compliance burden compared to storing card data

Typical setup:

  1. Offer both credit card and ACH at signup
  2. Incentivize ACH with small discount (1-2% discount still saves you money)
  3. Auto-retry failed payments with smart dunning
  4. Send payment confirmations and upcoming payment reminders
  5. Provide customer portal for payment method management

Results: SaaS companies typically see 15-25% of customers choose ACH when offered, resulting in $500-2,000+ monthly savings depending on volume.

ACH Processing for B2B Companies

Business customers prefer ACH for invoice payments and recurring services.

Why B2B companies use ACH:

  1. Business customers have established AP processes that prefer ACH
  2. Large transaction amounts make ACH savings significant
  3. NET 30 terms work better with scheduled ACH than cards
  4. Easier reconciliation for business customers
  5. Matches how businesses already pay other vendors

Common B2B ACH use cases:

  1. Monthly service retainers ($2,000-10,000+)
  2. Large equipment or inventory purchases
  3. Professional services invoices
  4. Ongoing consulting or agency fees
  5. Wholesale or distributor payments
  6. Franchise or license fees

Integration approach:

  1. Include ACH option on all invoices over $500
  2. Offer ACH via payment portal or email payment links
  3. Set up automatic monthly billing for retainer clients
  4. Provide detailed remittance information for reconciliation
  5. Send advance payment notifications 3-5 days before debit

ACH Processing for Healthcare Providers

Medical practices, dental offices, and healthcare facilities use ACH for patient payments and recurring billing.

Healthcare ACH applications:

  1. Patient responsibility amounts after insurance
  2. Payment plans for large procedures
  3. Monthly membership medical practices (DPC, concierge)
  4. Recurring therapy or treatment payments
  5. Insurance premium collection

HIPAA considerations:

  1. ACH payment processing is HIPAA compliant
  2. Ensure Business Associate Agreement (BAA) is in place
  3. Protect payment data with same security as PHI
  4. Limited payment description fields maintain privacy

ACH Processing for Gyms & Fitness Centers

Monthly membership dues collection with reduced failed payment rates.

Why fitness businesses use ACH:

  1. Members prefer automatic billing for convenience
  2. Lower processing costs on $30-200 monthly dues
  3. Reduced involuntary churn (cards expire, bank accounts don’t)
  4. Better member retention through frictionless payment
  5. Cash flow predictability for business planning

Typical setup:

  1. Collect bank information at membership signup
  2. Auto-bill on specific day each month
  3. Send payment reminders 3 days before billing
  4. Automatic retry for NSF situations
  5. Member portal for updating payment information

ACH Processing for Utilities & Service Providers

Electricity, water, internet, and other recurring service providers rely heavily on ACH.

Advantages for utility companies:

  1. Predictable payment collection dates
  2. Lower processing costs at scale
  3. Reduced late payments through autopay
  4. Fewer disconnections due to missed payments
  5. Lower administrative costs (no check processing)

Utility-specific features:

  1. Variable amount billing for usage-based services
  2. Paper check conversion (convert mailed checks to ACH)
  3. Payment plans for past-due accounts
  4. Budget billing programs (fixed monthly amount)
  5. Seasonal payment variations

ACH Processing for Nonprofits & Membership Organizations

Recurring donations and membership dues collection.

Why nonprofits use ACH:

  1. Lower processing costs mean more funds go to mission
  2. Monthly recurring donations have higher lifetime value
  3. Reduced donor churn (cards expire frequently)
  4. Better for larger donations ($100+)
  5. Sustainer programs rely on low-friction automatic payments

Nonprofit considerations:

  1. Some donors prefer ACH for tax advantages
  2. Grant disbursements often use ACH
  3. Clear communication about recurring donation schedules
  4. Easy cancellation process for donor trust
  5. Detailed receipts for tax deduction documentation

ACH Network Rules & Compliance

NACHA Operating Rules

All ACH processing must comply with NACHA (National Automated Clearing House Association) operating rules.

Key compliance requirements:

Authorization Requirements Every ACH debit must have proper customer authorization:

  1. WEB transactions: Online authorization with timestamp
  2. TEL transactions: Verbal authorization with recording
  3. PPD transactions: Written authorization with signature
  4. Authorization must be clear, conspicuous, and readily identifiable
  5. Must disclose terms, amount, frequency, and account details

Authorization retention:

  1. Keep authorization records for 2 years after termination
  2. Must be able to produce authorization within 10 days if questioned
  3. Include sufficient information to identify the customer and transaction

Revocation rights:

  1. Customers can revoke authorization at any time
  2. Must stop debits within “reasonable time” after revocation notice
  3. Typically 3 business days is considered reasonable

SEC Codes for ACH Transactions

Different transaction types use different Standard Entry Class (SEC) codes:

WEB - Internet-Initiated Entry

  1. Online payment authorizations
  2. Customer authorizes via website or app
  3. Most common for e-commerce and SaaS

PPD - Prearranged Payment & Deposit

  1. Consumer payments with written authorization
  2. Payroll direct deposits
  3. Requires signed authorization form

CCD - Corporate Credit or Debit

  1. Business-to-business transactions
  2. Corporate trade payments
  3. B2B service payments

TEL - Telephone-Initiated Entry

  1. One-time payments authorized by phone
  2. Verbal authorization must be recorded
  3. Not permitted for recurring payments

BOC - Back Office Conversion

  1. Converting paper checks to ACH at point of sale
  2. Used by retail businesses

ACH Return Codes

When ACH payments fail, they’re returned with specific reason codes:

R01 - Insufficient Funds

  1. Most common return reason
  2. Typically retry-able after a few days
  3. Customer should be notified

R02 - Account Closed

  1. Bank account no longer open
  2. Do not retry
  3. Contact customer for updated information

R03 - No Account/Unable to Locate

  1. Account number doesn’t exist
  2. Verify account information with customer
  3. Do not retry without corrected information

R04 - Invalid Account Number Structure

  1. Account number format is incorrect
  2. Check for typos or transposition errors
  3. Verify correct routing and account numbers

R05 - Unauthorized Debit to Consumer Account

  1. Customer claims they didn’t authorize the transaction
  2. Must provide authorization documentation
  3. May result in penalties if authorization insufficient

R07 - Authorization Revoked

  1. Customer revoked authorization to debit account
  2. Must stop all future debits
  3. Common when customers cancel subscriptions

R08 - Payment Stopped

  1. Customer placed stop payment on ACH debit
  2. Contact customer to resolve
  3. May indicate dispute or unauthorized claim

R10 - Customer Advises Not Authorized

  1. Similar to R05, customer disputes authorization
  2. Provide authorization documentation
  3. May face penalties if unable to prove authorization

R29 - Corporate Customer Advises Not Authorized

  1. Business customer disputes authorization
  2. Provide authorization documentation
  3. Used for CCD transactions

ACH Risk Management & Fraud Prevention

Account Verification Verify bank accounts before processing to reduce returns:

  1. Instant verification through bank login
  2. Micro-deposit verification (2-3 days)
  3. Prenote verification (zero-dollar test)
  4. Database verification services

Velocity Controls Limit transaction frequency and amounts:

  1. Maximum transaction amount per customer
  2. Maximum number of transactions per day
  3. Maximum total dollar amount per day
  4. Alerts for unusual patterns

Duplicate Detection Prevent accidental duplicate transactions:

  1. Check for same amount/account in recent history
  2. Flag suspicious duplicate submissions
  3. Require confirmation for duplicate-appearing transactions

Geolocation & Device Fingerprinting Track where payments originate:

  1. Flag payments from high-risk countries
  2. Identify payments from unusual locations
  3. Track device IDs for repeat customers
  4. Alert on new device usage

Customer Behavior Analysis Monitor for suspicious patterns:

  1. First transaction velocity (common fraud pattern)
  2. Multiple accounts from same IP address
  3. Rapid account information changes
  4. High-value initial transactions

ACH Processing Requirements

Business Requirements

  1. Valid business entity (LLC, Corporation, Sole Proprietorship, Partnership)
  2. Business bank account in company name
  3. Federal EIN or SSN for sole proprietors
  4. Physical business address (no PO boxes for high-risk)
  5. Business description and website (if applicable)
  6. Processing history from previous processor (if switching)

Documentation Requirements

  1. Completed ACH origination application
  2. Business license or incorporation documents
  3. Bank account verification (voided check or bank letter)
  4. Personal identification for business owners
  5. Most recent bank statements (for some business types)
  6. Sample authorization forms for review

Authorization Requirements

  1. Properly formatted authorization forms or online agreements
  2. Clear disclosure of ACH terms
  3. Customer consent to debit bank account
  4. Compliance with NACHA operating rules
  5. Authorization storage and retrieval procedures

Risk-Based Requirements

Some business types may require additional documentation:

  1. Financial statements
  2. Credit check authorization
  3. Personal guarantee from business owners
  4. Rolling reserve account (percentage held for returns)
  5. ACH return monitoring and limits

Setting Up ACH Processing

Step-by-Step ACH Setup Process

1. Application & Approval (1-3 business days)

  1. Complete online ACH origination application
  2. Provide business documentation
  3. Submit authorization form samples for review
  4. Risk assessment and underwriting review
  5. Most businesses approved within 1-3 business days

2. Account Configuration (1-2 days)

  1. Set transaction limits and controls
  2. Configure batch windows and settlement
  3. Establish return handling procedures
  4. Set up user accounts and permissions
  5. Define reporting preferences

3. Integration & Testing (1-2 weeks)

Choose your integration method:

  1. API Integration: RESTful API with full documentation
  2. Hosted Pages: Quick-start with embeddable forms
  3. Virtual Terminal: Web-based manual entry
  4. Batch Upload: File-based processing
Testing phase:
  1. Use sandbox environment with test accounts
  2. Process test transactions with various scenarios
  3. Verify webhook notifications
  4. Test authorization and verification flows
  5. Confirm return handling

4. Compliance Review

  1. Review authorization forms and procedures
  2. Verify NACHA compliance
  3. Confirm return handling processes
  4. Establish record retention systems
  5. Complete compliance checklist

5. Go Live

  1. Switch to production credentials
  2. Process first live transactions with monitoring
  3. Verify settlement and funding
  4. Confirm reporting accuracy
  5. Begin full-scale processing

Total Setup Time: Most businesses are processing ACH within 2-3 weeks.

ACH Processing Best Practices

Reduce Return Rates

Verify Bank Accounts

  1. Use instant verification or micro-deposits
  2. Verify before first transaction whenever possible
  3. Re-verify if customer changes account information
  4. Consider prenotes for high-value transactions

Clear Communication

  1. Send payment confirmation emails immediately
  2. Provide advance notice 3-5 days before debits
  3. Use recognizable company name in bank descriptors
  4. Include clear contact information for questions

Proper Authorization

  1. Use clear, unambiguous authorization language
  2. Collect all required information
  3. Timestamp online authorizations
  4. Store authorizations securely
  5. Make authorization retrieval easy

Smart Retry Logic

  1. Retry NSF returns after 3-5 days
  2. Don’t retry closed accounts or invalid numbers
  3. Limit retry attempts (typically 2-3 maximum)
  4. Notify customers before retry attempts
  5. Escalate after failed retries

Improve Customer Experience

Payment Method Management

  1. Provide self-service portal for account updates
  2. Make adding/changing payment methods easy
  3. Send confirmation when payment methods change
  4. Allow customers to view payment history

Transparent Billing

  1. Show upcoming payment dates and amounts
  2. Provide advance notices before charges
  3. Send detailed payment receipts
  4. Make transaction history easily accessible

Flexible Payment Options

  1. Offer both one-time and recurring ACH
  2. Allow customers to choose payment dates
  3. Provide payment pause/restart options
  4. Enable payment method switching (card to ACH)

Responsive Support

  1. Provide clear contact information on payment communications
  2. Respond quickly to payment inquiries
  3. Have clear refund/dispute procedures
  4. Train support staff on ACH processes

Maximize ACH Adoption

Incentivize ACH Usage

  1. Offer 1-2% discount for ACH payments (still saves you money)
  2. Waive processing fees for ACH vs cards
  3. Waive processing fees for ACH vs cards
  4. Create “preferred customer” benefits for ACH users

Strategic Positioning

  1. Present ACH as primary option for transactions over $500
  2. Position as “direct bank payment” rather than technical “ACH”
  3. Emphasize convenience of automatic payments
  4. Highlight security of bank-level encryption

Smooth Onboarding

  1. Make bank account entry simple and clear
  2. Provide instant verification when possible
  3. Offer assistance during setup
  4. Send welcome email with payment confirmation

Education & Trust

  1. Explain how ACH works in simple terms
  2. Address security concerns proactively
  3. Provide FAQ about ACH payments
  4. Show trust indicators (NACHA compliant, encrypted, etc.)

ACH Processing FAQs

What is ACH payment processing?

ACH (Automated Clearing House) processing is an electronic payment method that transfers funds directly between bank accounts through the ACH Network. Unlike credit cards, ACH moves money from your customer’s checking or savings account directly to your business bank account without going through card networks like Visa or Mastercard. ACH is commonly used for direct deposit, recurring bill payments, and business-to-business transactions.

How much does ACH processing cost?

Coastal Pay charges 1% per ACH transaction with no monthly fees, setup fees, or hidden charges. For Same-Day ACH processing (faster settlement), there’s an additional $1.00 fee per transaction. This is significantly less expensive than credit card processing, which typically costs 2.5-3.5% per transaction. For example, a $5,000 payment costs $50 via ACH compared to $125-175 via credit card. 

How long does ACH processing take?

Standard ACH processing takes 3-4 business days from initiation to funds being available in your account. Same-Day ACH settles in hours (same business day) for urgent transactions. The timeline breaks down as: Day 1 – transaction initiated, Days 2-3 – ACH network processing, Day 4 – funds available. Remember that ACH only processes on banking business days (Monday-Friday, excluding bank holidays).

What's the difference between ACH and wire transfer?

ACH is a batch processing system that handles high volumes of transactions cost-effectively (1% at Coastal Pay). Settlement takes 3-4 business days for standard ACH. ACH is ideal for recurring payments, subscription billing, and non-urgent transfers.

Wire transfers are individual, real-time transactions that settle within hours or same-day but cost significantly more ($15-45 per transaction typically). Wire transfers are best for urgent, high-value, one-time payments where speed is critical. 

Bottom line: Use ACH for recurring or planned payments to save money. Use wire transfers only when you need same-day settlement and the urgency justifies the higher cost. 

Is ACH processing secure?

Yes, ACH processing is highly secure. All transactions are encrypted and processed through the Federal Reserve or The Clearing House—the same secure networks banks use. Bank account information is tokenized (replaced with secure tokens) so actual account numbers are never stored. ACH is regulated by NACHA and must follow strict security and compliance rules. Additionally, ACH fraud rates are significantly lower than credit card fraud rates. 

What's the difference between ACH debit and ACH credit?

ACH debit is when you (the business) pull funds from a customer’s bank account. This is used for collecting payments, subscription billing, invoice payments, and recurring charges. The customer authorizes you to debit their account. 

ACH credit is when you (the business) push funds to someone else’s bank account. This is used for payroll direct deposit, vendor payments, refunds, and contractor payments. You initiate the transfer of funds from your account to theirs. 

Think of it this way: Debit = collecting money, Credit = sending money.

Can customers dispute ACH transactions?

Yes, customers can dispute ACH transactions under certain circumstances:

Unauthorized debits: Customers have 60 days to dispute unauthorized ACH debits. If they
claim the transaction wasn’t authorized, you must provide proof of authorization.

Incorrect amounts: Customers can dispute if the amount debited differs from what was
authorized.

Revoked authorization: If a customer revokes authorization and you continue debiting, they can dispute the transaction.

Best protection: Maintain clear authorization records, use recognizable billing descriptors, send payment confirmations, and respond quickly to customer inquiries to prevent disputes. 

What happens if an ACH payment fails?

Failed ACH payments are “returned” with specific reason codes indicating why:

Insufficient funds (NSF): Most common reason. These can typically be retried after 3-5 days.

Account closed: Customer closed the bank account. Contact customer for updated information. Don’t retry.

Invalid account number: Account number error. Verify correct information with customer before retrying.

Authorization revoked: Customer canceled authorization. Stop all future debits. When returns occur, you’re typically charged a return fee ($2-5 industry standard). Coastal Pay provides automatic return handling and smart retry logic for correctable issues.

Do I need authorization to process ACH payments?

Yes, absolutely. NACHA rules require proper authorization before debiting any customer’s bank account. Authorization must include:

  1. Customer’s bank account and routing numbers
  2. Amount and frequency of debits
  3. Your company name and contact information
  4. Customer’s explicit consent to debit their account
  5. Date authorization was obtained

Authorization methods:

  1. Online: Digital acceptance with timestamp
  2. Written: Signed authorization form
  3. Verbal: Recorded phone authorization (for one-time only)

You must retain authorizations for 2 years after the last transaction and be able to produce them within 10 days if questioned.

Can I use ACH for recurring billing?

Yes, ACH is ideal for recurring billing and subscription businesses. Benefits include:

  1. Lower processing costs (1% vs 2.5-3.5% for cards) authorization form
  2. Reduced involuntary churn (bank accounts don’t expire like credit cards)
  3. Automatic payment collection on your schedule
  4. Flexible billing frequencies (weekly, monthly, quarterly, annual)
  5. Variable amounts for usage-based billing
  6. Smart retry logic for failed payments

You’ll need proper authorization that specifies the recurring nature of the charges. Many SaaS and subscription businesses see 15-25% of customers choose ACH when offered, resulting in significant cost savings.

What's the ACH return rate?

Industry average ACH return rates run 1-2% for established businesses with verified bank accounts. This is significantly lower than credit card decline rates (5-10% including expired cards and declined charges). 

How to minimize returns:

  1. Verify bank accounts before first transaction
  2. Use clear billing descriptors
  3. Send advance payment notifications
  4. Maintain proper authorizations
  5. Respond quickly to customer inquiries
  6. Don’t debit accounts after authorization revocation

Coastal Pay provides tools and best practices to keep your return rate as low as possible.

Can I accept ACH payments internationally?

ACH is a U.S.-based payment network and only works with U.S. bank accounts. For international payments, you’ll need: Coastal Pay provides tools and best practices to keep your return rate as low as possible.

  1. Wire transfers: For international one-time payments (expensive but fast)
  2. International ACH (IAT): Available for select countries through correspondent banking
  3. Global payment networks: Services like SWIFT for international transfers
  4. Local payment methods: Country-specific bank transfers (SEPA in Europe, etc.)

If you need to collect payments from international customers, consider offering credit card processing (works internationally) in addition to ACH for U.S.-based customers.

What's the difference between ACH and EFT?

EFT (Electronic Funds Transfer) is a broad term for any electronic money movement—including ACH, wire transfers, ATM transactions, and debit card payments.

ACH is a specific type of EFT that uses the Automated Clearing House network for batch processing of transactions.

Think of it this way: All ACH transactions are EFTs, but not all EFTs are ACH. When people say “EFT payment,” they often mean ACH, but it’s technically a broader category.

Can I accept ACH and credit cards?

Absolutely, and you should! Offering both payment methods gives customers choice and optimizes your processing costs:

Use credit cards for:

  1. Smaller transactions (under $300)
  2. One-time purchases
  3. When instant authorization is needed
  4. Consumer (B2C) transactions
  5. International payments

Use ACH for:

  1. Larger transactions (over $300)
  2. Recurring billing and subscriptions
  3. B2B invoice payments
  4. When cost savings matter more than instant approval
  5. Customers who prefer bank payments

Best practice: Display both options at checkout, and consider offering a small discount (1-2%) for ACH on larger transactions to incentivize adoption while still saving money.

What industries commonly use ACH processing?

ACH processing is widely used across many industries:

Software & SaaS: Monthly subscription billing, usage-based pricing

B2B Services: Invoice payments, retainer billing, wholesale

Healthcare: Patient payments, payment plans, membership practices

Fitness & Wellness: Monthly gym memberships, class packages

Utilities: Electric, water, internet, phone bills

Insurance: Premium collection, recurring policy payments

Financial Services: Loan payments, investment transfers

Nonprofits: Recurring donations, membership dues

Education: Tuition payments, payment plans

Property Management: Rent collection, HOA dues

Essentially any business with recurring billing or larger transaction amounts benefits from ACH.

Do I need a merchant account for ACH processing?

Yes, you need an ACH merchant account (also called an ACH origination account) to process ACH payments. This is different from a credit card merchant account. The ACH merchant account connects your business bank account to the ACH Network and allows you to: 

  1. Initiate ACH debits and credits
  2. Process transactions through the Federal Reserve or The Clearing House
  3. Receive funds from customer bank accounts
  4. Send funds to vendors, employees, or customers

Coastal Pay provides both ACH merchant accounts and credit card merchant accounts, allowing you to accept all major payment types through a single provider. 

How do I get started with ACH processing?

Getting started with Coastal Pay ACH processing is straightforward:

  1. Apply (15 minutes): Complete our online application with basic business information.
  2. Approval (1-3 days): Most businesses are approved within 1-3 business days. We’ll review your application and may request supporting documentation.
  3. Integration (1-2 weeks): Choose your integration method (API, hosted pages, virtual terminal, or batch upload). Our technical team supports you through setup and testing.
  4. Go Live: Start accepting ACH payments with full monitoring, reporting, and support.  

Total timeline: Most businesses are processing ACH payments within 2-3 weeks.

Get Started with ACH Processing

Save Up to 66% on Payment Processing Costs

Stop losing 2-3% of every transaction to credit card fees. ACH processing at 1% gives you a cost-effective alternative for recurring billing, large transactions, and B2B payments.

What happens next:

  1. Calculate your savings based on your transaction volume
  2. Get a custom quote with no obligation
  3. Simple application takes 15 minutes
  4. Approval in 1-3 business days
  5. Start processing within 2-3 weeks
Calculate Your ACH Savings
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Questions About ACH Processing?

Our payment experts can help you understand if ACH is right for your business, calculate potential savings, and answer any technical questions.

No sales pressure. No obligation. Just honest answers.

Related Payment Solutions

  1. Credit Card Processing – Accept all major credit and debit cards
  2. Payment Gateway – Free gateway with advanced features
  3. Recurring Billing Solutions – Automated subscription management
  4. B2B Payment Solutions – Invoice and large transaction processing
  5. Same-Day ACH – Faster settlement for urgent payments
  6. Virtual Terminal – Process payments from any web browser
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