High-Risk ACH Payment Processing

Scale your business with ACH Payments

While many companies are focused on credit card processing as a means to grow their customer base, ACH payment solutions shouldn’t be overlooked. Their low-cost processing and ease of use make electronic ACH solutions a perfect option for many businesses.

Processing payments in batches with ACH not only reduces your transaction costs to grow revenue, but the benefits go beyond cost-savings. Get rid of the burden of processing paper checks. Manually processing payments and frequent trips to the bank are stopping you from focusing on other areas of your business.

Digital payments provide your customers with a smooth transaction and the added security reassures them that their information is protected. Their trust in your payment processing will keep them coming back, helping your business reach your goals and grow to new heights.

Credit card processing is considered the gold standard of payment for all types of products and services for business owners and managers. No matter what type or size the business, credit cards make payments quick and easy for customers. Plus, they eliminate tedious bookkeeping, paperwork, and payment tracking for owners and managers. But while credit cards provide an essential solution for businesses, industries that are considered "high-risk" often have difficulty getting approved for a credit card processing account. In addition, more and more consumers today are committed to going "cardless," preferring cash-only transactions so they can eliminate personal credit card debt.

Fortunately, there's a streamlined solution for businesses and consumers who want to limit their use of credit cards while still enjoying the convenience of online and electronic payments. Thanks to a payment gateway network called Automated Clearing House (ACH), payments can be electronically transferred between bank accounts across the US without the use of a credit or debit card.

ACH, which has actually been around since the 1970s, is operated by an organization called the National Automated Clearing House Association (NACHA). If you've never heard of it, you might be surprised to find that its popularity steadily increases every year. Just to give you an idea, the volume of ACH network payments increased by 7.7 percent in just the third quarter of 2021, processing 7.3 billion payments valued at $18.1 trillion, representing an increase of 13.8 percent over the previous year.

What can ACH do for your high-risk business?

High-risk ACH processing enables your business to process payments in batches, which reduces your transaction costs and, by doing so, boosts profit and revenue. It also mitigates time-consuming bookkeeping, paperwork, and trips to the bank by eliminating the need for paper checks. With its electronic, digitized convenience and payment tracking services, you'll be able to spend more time focusing on managing your company.

Plus, high-risk ACH processing provides your customers with a user-friendly platform that offers maximum security, so all personal information is protected. You'll enjoy increased customer loyalty and retention by offering a trustworthy, secure payment system.

While many companies focus on credit card processing as a way to grow their customer base, it's important not to overlook the benefits of ACH automated payment solutions. They provide a wide variety of low-cost processing options, as well as other user-friendly advantages that make them an essential payment solution for today's high-risk business owners. Speaking of high-risk businesses…

Why are some businesses designated as "high-risk"?

If you've ever been declined after applying for a merchant payment processing account, you probably already know that you're in a high-risk industry. However, many business owners and managers don't realize this until they get a wake-up call in the form of a declined application from a payment processing company. This denial means that their business won't be able to provide convenient, user-friendly credit card payments for its customers.

What makes an industry high-risk? It all has to do with credit trustworthiness. In the case of merchant processors, this involves chargeback rates.

Chargebacks are essentially credit card returns or payment cancellations. They can end up costing a lot of money for merchant processing companies, and some industries have a significantly higher rate of chargebacks than others. This is due to a number of factors that usually aren't under the industry's control. For example, in 2020 and 2021, tourism industries dealt with large numbers of vacation cancellations due to the pandemic, resulting in a higher-than-usual rate of credit card chargebacks for down payments and entire trip costs. Even before the pandemic, this number was high, with one out of every eight chargebacks taking place in the tourism industry during 2019.

Likewise, property management companies are typically prone to chargebacks from tenants who either default on their rent or refuse to pay because of disputes with their landlords. And while the cannabis industry is booming in the US, the nation's credit card payment processors still refuse to work with cannabis businesses because cannabis has not yet been legalized on the federal level.

Even if your own business is successful and has a low chargeback rate, you still might be denied credit card processing services if you're in a high-risk industry.

Which industries are considered high-risk? Here's a list of just a few of them:

• Property management companies
• Adult entertainment businesses
• Cannabis companies
• Gun companies
• Subscription billing companies
• Nutraceutical product vendors
• Fantasy sports companies
• Online dating companies
• Online gambling companies
• Collectibles/antiques businesses
• Independent health and beauty companies
• Pay-day lending businesses
• Pawnshops

While chargebacks are a primary reason why industries are considered high-risk, it's also important to note that many customers actually prefer to pay in cash, which is another reason why ACH payments are on the rise.

The "going cardless" culture

In today's economic culture, credit card debt has become a way of life. Millions of consumers are opting to go without credit cards to reduce debt as much as possible. In addition, some customers don't like giving their personal information to multiple credit card companies. They feel it makes them more vulnerable to identity theft and fraud. Finally, many customers would rather forego the convenience of credit cards altogether because of high fees and interest rates.

If your business is in a high-risk industry or you have a lot of customers who prefer paying cash, you might want to consider high-risk ACH processing services.

What are ACH payments and how do they work?

ACH payments are basically bank-to-bank money transfers that are processed electronically through the ACH automated payment network. Standard transactions are processed one at a time through user interaction. Still, ACH operates as an automated batch processing system. ACH processes transactions in groups or batches, which eliminates the need for user interaction. Typically, ACH batch processing is conducted by banks and financial institutions three times per business day.

ACH transfers are typically used in direct deposit or online bill payment systems, so you may already be using ACH transfers in your daily financial transactions. On a business level, ACH can be used to make or receive payments to and from customers, clients, and vendors.

Because they bypass manual interaction and are completely automated, ACH transfers eliminate the need for credit cards. In many ways, this makes them even more convenient than credit card payments and makes them an ideal solution for high-risk industries that can't get credit card processing approval. In addition, high-risk ACH processing eliminates check writing and bookkeeping, as well as costly processing fees.

Benefits of ACH processing for high-risk businesses

If you own or manage a business in a high-risk industry, here's a look at some of the benefits you'll get from an ACH high-risk processing merchant account.

Electronic, bank-to-bank transferral means no manual interaction

ACH payments are fully automated, which means that the middleman who manually processes the payments is gone. Automated payments can mitigate the occurrence of clerical errors, lags, and delays for both businesses and customers.

Direct deposit convenience

As one of the fastest, most convenient electronic payment methods ever devised, direct deposit means that you'll get your payments more quickly.

No more paperwork

You can push ACH payments through multiple times daily, and you don't need to deal with paper checks. This results in fewer trips to your bank, so you can focus on running your business instead of tracking and manually processing payments. And ACH provides a seamless billing/payment process for both you and your customers.

Reduced fees

By processing ACH payments in multiple batches per day, financial institutions are able to cut back on the fees for processing paper checks and credit cards. This reduces costs and increases profits for your business. In fact, ACH transfers are sometimes even free, depending upon the type of transfer and the bank involved. And if there does happen to be a fee, it's usually just a few dollars.

State-of-the-art encryption technology

With the risk of cybercrime and identity fraud, it's worth noting that ACH offers improved, next-generation encryption technology throughout its network. As a result, ACH payment processing is actually safer and more secure than processing paper checks.

Customized payment options for your customers

One hallmark of a professional, reputable company is the ability to offer customers a variety of payment options. With high-risk ACH processing, you'll be able to provide your customers with a streamlined checkout process as well as their preferred options for online payments.

No more manual processing for recurring payments

Manual processing can be subject to human error, no matter how carefully it's done. ACH processing completely automates billing and payments and eliminates the clerical errors that often occur through manual processing.

Easier payment tracking

With ACH, you'll be able to instantly track your payments electronically, from the moment they were submitted throughout their processing time.

No more bounced checks

Paper checks are always a risk, and nothing is worse than having to track down a customer because of a bounced check. This usually happens because a customer simply isn't very good at bookkeeping. With ACH, you'll never have to deal with paper checks again. Plus, you won't have to delay services or shipments while waiting several business days for a check to clear. And if there's ever an issue with receiving funds, you'll be alerted immediately.

Automatic invoicing

ACH provides automatic invoicing, eliminating the need for you to send out individual invoices manually. This not only saves a lot of time and tedious work; it also makes paying much easier for your customers.

Payment from the convenience of your home

With ACH transfers, you can pay or receive funds from the comfort of your own home without having to go to the bank. This means that you can receive payments from customers and pay vendors from your mobile device or computer.

Choosing an ACH payment processing company

If ACH transfers sound like a good idea for your business, then the next step is to find a top-notch merchant payment processing company that provides ACH payment services. Here's what to look for:

• First and foremost, make sure that they offer ACH transfer services. While high-risk merchant processing companies might seem the same, each one offers a different roster of payment solutions. As a result, some of them focus entirely on credit card processing and don't even offer ACH services.

• Make sure that they accept merchant accounts in your high-risk industry. Some high-risk ACH processing companies specialize in a specific industry like cannabis or property management. Others limit themselves to a number of specific industries that might not include yours.

• Determine whether the payment processor offers fair and balanced pricing for its services. As a merchant in a high-risk industry, you're probably going to pay higher fees than the industry standard. It's unavoidable because these higher fees help cover risks that gateway payment processors incur by working with high-risk companies. However, a reputable high-risk merchant processing company will disclose these fees and try to keep them to a minimum. Also, according to industry standards, the fees for Visa, Mastercard, American Express, and Discover should all be the same, so keep your eyes open for these discrepancies.

If you're ready to take your business to the next level with ACH payments, Zenti can help. Zenti helps provide high-risk ACH processing services to merchants in all kinds of high-risk industries, so they can streamline their payments while retaining customer satisfaction and loyalty.

Zenti also helps merchants get the full roster of payment processing options they need for success, including credit card, e-check, and mobile app payment options. In addition, Zenti offers protection solutions to help you reduce chargebacks and eliminate time-consuming bookkeeping every month. Contact us for a free consultation to find out more about our roster of high-risk merchant services. Our experts will show you how to boost sales, mitigate risks, and improve customer satisfaction by getting the payment processing options your business needs and deserves.