What is an ACH Payment? Mobile Processing in the Digital Age
ACH stands for Automated Clearing House. ACH payment processing allows people to make payments from their bank accounts for mortgage loans, utilities, and other types of bills via electronic credit or debit transfers using mobile devices. Many payment processors provide ACH processing options to their customers, particularly for subscription-based and monthly transactions. ACH payment processing is proliferating in the market as businesses come round to preferring ACH to debit and credit cards.Many payment solutions also prefer ACH processing for sending money to their customers.
YapStone and ACH Payment Processing
YapStone’s ACH solutions include advanced features that make it simple to accept payments via smart mobile devices. As the mobile payment service provider for a wide range of companies from startups to small businesses to large enterprises, YapStone is delivering maximum convenience and freeing our partners and their customers from the oppression of paper checks. They also benefit from the ability to seamlessly manage the reporting and reconciliation associated with mobile ACH transactions.
How Does Mobile ACH Payment Processing Work?
There are a number of steps involved in accepting ACH debits from your customers via mobile:
Step 1: User Initiates Online Payment via ACH
The user engages with one of YapStone’s mobile web pages, payment apps or other ACH processing systems to pay rent, pay HOA dues, make a donation or book a vacation home rental. After selecting ACH/eCheck as the payment method, the user provides their name, bank account number, and bank routing number, and then submits a payment.
Step 2: YapStone to Payment Processor
YapStone batches accumulated ACH transaction details for the day’s electronic check payments and forwards them to its payment processor via an ACH file.
Step 3: Payment Processor to ACH Network to User Bank
The payment processor sends the details to its bank, known as the Originating Depository Financial Institution (ODFI) that sends them through the ACH network. They are then sent to the user’s bank (known as the RDFI or Receiving Depository Financial Institution) to be posted.
Step 4: User’s Receiving Bank
The ACH debits are posted to the user’s account, and the merchant can typically expect access to the funds in 3-5 business days. Upon logging in, the merchant is able to see if electronic check payments are processing, cleared or reversed. YapStone merchant reports that show ACH activity details for reconciliation purposes become available as soon as ACH batches are forwarded to the bank. These include the Transaction Activity Report, Transaction Summary Report and a Recapture Statement.
Step 5: Payment Processor to ACH Network to YapStone
If the ACH transaction does not post, YapStone is notified via the same chain, with the receiving bank (RDFI) sending the electronic check item back to the ACH network, which delivers it back to the ODFI/processor, who then notifies YapStone that the transaction was unsuccessful. It can take several business days to receive returned item notification because the ACH Network is not an instantaneous system.
Due to the fact that the transaction could be returned because of non-sufficient funds (NSF), funds provided to the merchant will need to be recovered. In the event of this happening, YapStone passes along the non-sufficient funds fee charged by the RDFI to the merchant, together with the un-posted item. The NSF fee follows the same channels as the returned item – from the RDFI through the ACH network, followed by the ODFI/payment processor, and lastly to YapStone before going to the merchant.
Why Accept ACH Payments with YapStone?
Working with us you’re a valued partner not a customer. It’s a big reason why all types of companies of all sizes, from property management companies to vacation rental owners to non-profits, accept electronic check payments through YapStone. Of course, they also like the fact that we’re considered experts in the industries in which we work, not to mention our innovative payment and risk management platform and the recognition that comes from processing 8-billion dollars in electronic payments every year.