What Is ACH?
ACH stands for Automated Clearing House, a network used for electronic payments and money transfers in the United States. Instead of using credit cards or checks, ACH payments transfer funds directly between bank accounts, making them a secure and cost-effective option for businesses and clients.
When a client pays using ACH, the payment request is sent through the ACH network, processed by the bank, and settled over a few business days. ACH is commonly used for membership payments, recurring billing, and large one-time transactions due to its lower transaction fees compared to credit card payments.
How Does ACH Work?
Unlike credit card transactions, which are processed almost instantly, ACH transactions go through an initiation and settlement phase, which take time to clear.
Here’s how the process works:
Client Authorization – The client provides their bank account details and authorizes ACH payments.
Transaction Initiation – The payment request is sent through the ACH network.
Processing & Settlement – The transaction goes through verification and approval.
Funds Transfer – If approved, funds are transferred from the client’s bank to your merchant account.
Settlement Times
Average Processing Time: 3-5 business days
Maximum Wait Time Before Defaulting to Failure: Up to 14 days
ACH payments do not settle instantly, so businesses should plan accordingly, especially for time-sensitive payments like membership renewals.
What are the advantages and disadvantages of using ACH?
Advantages of Offering ACH Payments
Reduced Chargeback Risk – Unlike credit cards, ACH payments have a lower chance of being disputed as fraudulent, minimizing chargeback risks.
Recurring Payment Convenience – ACH is ideal for subscription-based or recurring payments (e.g., memberships, service fees) since it provides a stable and automated payment method.
Higher Transaction Limits – ACH allows for larger payments compared to credit cards, making it suitable for high-value transactions.
Disadvantages of Offering ACH Payments
Longer Processing Time – ACH transactions take 1–3 business days to settle, compared to instant credit card authorizations.
Risk of NSF (Non-Sufficient Funds) – ACH payments can be rejected due to insufficient funds, requiring businesses to follow up on failed transactions.
Limited Consumer Adoption – Many customers prefer using credit cards for rewards, fraud protection, or convenience, making ACH adoption slower.
Bank Account Information Required – Customers must provide bank details, which can create friction in the payment process compared to simply entering a card number.
Fewer Fraud Protections – Unlike credit cards, ACH payments do not offer the same level of consumer fraud protection, which could be a concern for customers.
How to Enable ACH in WellnessLiving
Before accepting ACH payments in WellnessLiving, you must apply for ACH processing with your merchant processor. ACH is not automatically enabled, and approval is required before transactions can be processed.
Step 1: Apply for ACH Processing
Contact the WellnessLiving merchant processing team ([email protected]) and let them know that you’re planning on starting an ACH application with your current merchant processor. We will provide you with some extra assistance on how to get started.
Contact your merchant processor and request an application for ACH payment processing.
Submit the required documentation and wait for approval.
Once approved, your merchant processor will enable ACH payments for your business.
Step 2: Enable ACH as a Payment Method in WellnessLiving
Once ACH is approved, follow these steps to enable it in WellnessLiving:
Go to Setup > Store Configuration > Store Settings.
Scroll down to the Payment Methods section.
Click on ACH to enable it. It should turn from grey to blue.
Off
On
Click Save to apply the changes.
Can Clients Use ACH for Online Payments?
Yes, clients can use ACH as a payment method in WellnessLiving, but only in specific scenarios:
ACH is available for recurring membership payments and one-time purchases through the business’s in-store payment system.
ACH may not be available for online store purchases depending on your merchant processor. Please reach out to [email protected] to identify whether your processor offers ACH as a method of payment.
Managing ACH Transactions
WellnessLiving allows you to track and manage ACH payments within your system.
Refunds: ACH refunds can take several days to process. Learn how to issue a refund in this article.
Updating Client Bank Details: If a client needs to change their ACH account, you can update their information by following the steps in this guide.
Failed Payments: If an ACH transaction fails (e.g., insufficient funds), WellnessLiving will mark the payment as unsuccessful after the maximum settlement time (up to 14 days).
Note: ACH payments are not verified instantly. The system does not check if the account has enough funds or if the details are correct when you enter them. This is only confirmed after processing, which can take a few days. If there’s an issue, like incorrect details or insufficient funds, the payment may fail later.
ACH Best Practices
To minimize ACH failed payments, businesses should follow these best practices:
1. Require Customer Authorization
Obtain a signed authorization form before initiating ACH transactions.
Clearly communicate the recurring payment schedule (if applicable) to avoid disputes.
2. Check for Non-Sufficient Funds (NSF) Risk
Monitor customer payment history and flag accounts with frequent NSF issues.
3. Process Payments on Optimal Days
Avoid processing ACH payments on weekends or holidays, as banks are closed, delaying settlement.
For recurring payments, align debits with typical paydays (e.g., the 1st or 15th of the month) to reduce NSF rejections.
4. Enable Automatic Retries
If an ACH payment fails due to NSF, set up an automated retry (e.g., after 3–5 business days) to increase the chance of success.
If you want to manually reprocess a failed automated payment, notify the customer immediately and allow them to fund their account before retrying.
5. Educate Clients on ACH Payment Timing
Let clients know that ACH payments can take up to 5 business days to process.
Encourage them to maintain a sufficient balance in their accounts.
Final Thoughts
ACH payments provide a secure and cost-effective way for businesses to accept low-risk, predictable bank-to-bank payments. While transactions take longer to settle than credit card payments, ACH is an excellent option for reducing transaction fees and handling recurring billing.
If you’re interested in enabling ACH, start by applying with your merchant processor, then enable ACH in Store Settings in WellnessLiving.
For more details on managing ACH payments, check out our support articles:
Need help? Contact our support team for assistance! 🚀